Thursday, 18 September 2014

Buy Property - Gangnam Style

Remember Psy and the megahit video Gangnam style ?  Yeah, I know, two years is the equivalent of a full Jurassic Age in pop music circles, but still ..... While you were trying to prance about like a horse, did you wonder what Gangnam style really meant ??

Gangnam is actually a suburb in Seoul, inhabited by the mighty and wealthy. The song was a parody of the lifestyles of those mighty men and women. Today Gangnam district came back into the news, with a property deal that raised my eyebrows so much that they vanished into my hairline (such as it is !). A 79,000 sq metre plot was up for sale. Thirteen bidders emerged, including two of Korea's biggest corporations , Hyundai and Samsung. Hyundai won it ; apparently they want to build their corporate headquarters there. The price tag ? A cool $ 10 bn. If you do the math , that is $126,000 per sq mtr. Or if you are an Indian, preferring ancient British metrics, Rs 7.6 lakhs per sq ft !!!

What sort of a crazy world do we live in where the price of a piece of land just enough to plant your two feet in and stand still, is more than the annual income of 99% of the population of the planet. Well, that is Gangnam style.

There is an ancillary question to be asked. What is Hyundai doing trying to build a corporate headquarters for $ 10 bn ? Investors are asking that question too. The shares of Hyundai were beaten down by 9% when news of this transaction broke out.  After all Hyundai didn't make a profit of $ 10bn last year. The pundits believe that Hyundai overpaid by about 3 times !  Hyundai defended it with typical corporatespeak - "Internally, we think we offered the appropriate price, considering various factors such as our global business plan and its future value ".

This blogger bought a Hyundai car a little while ago, for about the same price as would have fetched 1 sq ft of the land in Gangnam district. He is now unclear as to whether he should have opted to buy the land instead. You see, he is somewhat ( OK severely) dance challenged. However that has not deterred him from dreaming of some delectable dance moves that would make a dozen redheads swoon (Sriram please note !). So maybe, to get the right inspiration, he should have perhaps done the property deal and stood on his 1 sq ft plot of land in the middle of Gangnam district. And then practiced some intricate moves under the watchful tutelage of Psy. Trying to contort himself inside 1 sq ft may have perhaps cured his dance challenged status !

No use crying over spilt milk now. The car is there in the basement (for some hilarity on what this blogger is doing to it, read here). However he is intending to write to Chung Mong-koo, the patriarch of the Hyundai family offering to exchange his new car for the equivalent plot of real estate in Gangnam district. After all you see, its not very obvious which is overvalued more !!

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