It has already been 10 years since Daelim Warehouse, a cultural complex regarded as the starting point of Seongsu-dong's revival, opened its doors. As steeply rising rents pushed out the distinctive small businesses to other areas and vacancies increased, there were once concerns that "Seongsu-dong is now past its prime," but the scene across the Seongsu area today has instead grown more complex and larger. As the foot traffic of Koreans, centered on those in their 20s and 30s, has somewhat waned, foreign tourists have quickly filled that void.
According to the Korea Tourism Organization's DataLab on the 24th, Seongsu 2(i)-ga 3-dong, which runs from Exit 3 of Seongsu Station on Seoul Subway Line 2 to Yeonmujang-gil, the core commercial district, recorded cumulative card spending of 350.3 billion won from January to July this year, nearly matching the full-year 2024 spending of 367.7 billion won. Of this, 54.4% came from the wallets of foreign tourists. The number of foreign tourists, which stood at around 22,000 in 2021, grew more than 100-fold to about 2.228 million last year, and 1.98 million visited through July this year as well. According to global real estate services firm CBRE Korea, rents in Seongsu's major street-front commercial districts rose 14% year-on-year in the second quarter of this year, while the vacancy rate stood at 3.4%, lower than Gangnam (13.6%) and Hongdae (10.4%).
Bigger changes are taking place in the office market. The alleys that drew crowds evolved into a battleground for major brands, and are now emerging as a new business district drawing in even the large corporations of Gangnam and Pangyo. With the trendy area image and crowd-pulling power created by its young consumer population, a location embracing Seoul Forest and the Han River, transport access close to Gangnam, and the addition of large-scale new office supply, Seongsu—once a "neighborhood to go play in"—is now transforming into a "neighborhood to commute to." Accordingly, some forecast that a Seongsu Business District (SBD) will newly emerge in the office market, following the Central Business District (CBD), Gangnam Business District (GBD), and Yeouido Business District (YBD).
The early Seongsu office market was led by fashion and lifestyle companies. After Musinsa left Gangnam in 2022 and moved its headquarters to Seongsu-dong, it successively opened offices, studios, and stores, and IICOMBINED, which operates Gentle Monster and Tamburins, also established large-scale workshops and brand spaces in Seongsu. Musinsa currently operates six offices in Seongsu alone and is jointly developing its seventh office, E4, a 12-story above-ground building, with Mastern Investment Management. IICOMBINED's headquarters, "Gentle Monster House Nowhere Seoul," has established itself as a landmark where tourists line up to snap verification photos thanks to its unconventional exterior design. The strategy of these brands, which operate the streets as one giant "showroom," has clustered numerous fashion and cosmetics companies in Seongsu.
Recently, the character and scale of companies heading to Seongsu have expanded. Krafton, the game company famous for "PUBG: Battlegrounds," is building a super-large new headquarters with a total floor area of about 218,000 square meters on the site of the former E-Mart Seongsu branch to consolidate organizations scattered across Gangnam and Pangyo into Seongsu. Krafton is also working to bind the Seongsu area into a single "Krafton Town" by securing rights of first refusal for eight surrounding offices. Gmarket's headquarters and Hyundai AutoEver's business divisions have also announced plans to relocate to new offices completed in Seongsu-dong this year.
Going forward, a series of large-scale development projects that will raise Seongsu's stature by another notch are lined up. A representative example is the development of the former Sampyo Remicon site next to Seoul Forest, a project to build a residential tower of up to 81 stories and a business tower of 53 stories on a 28,332-square-meter site. Basic works such as soil remediation are currently underway, with construction set to begin next year and completion planned for 2032. Upon completion, it is expected to be Seoul's second-tallest landmark building and give rise to a large mixed-use business district linking Seoul Forest and the Han River.
Booyoung Group is also pursuing the development of a high-end mixed-use complex combining a hotel, residences, and cultural and commercial facilities on the nearby Ttukseom Booyoung Hotel site. After purchasing the site from the Seoul Metropolitan Government for 370 billion won in 2009, development had been halted for 17 years, but earlier this year Chairman Lee Joong-keun expressed his intention to resume the project, and basic works resumed. According to the plan, the project will include two towers of up to 49 stories above ground, comprising a 604-room five-star tourist hotel, 332 residence units, and a multipurpose performance hall with about 900 seats.
However, with the office space set to be supplied over the next five to six years observed to reach at least 600,000 square meters, there are also concerns about oversupply. According to RSQUARE, a comprehensive commercial real estate services company, the Seongsu-dong office vacancy rate, which had been kept below the natural vacancy rate (5%) through the third quarter of last year, soared to 14.5% within a single quarter. Ryu Kang-min, head of RSQUARE's research center, noted, "New buildings were concentrated in the fourth quarter of last year, but leasing demand filled up quickly and the office vacancy rate continues to decline," adding, "The Seongsu area is seeing rising corporate density as office leasing demand based on preferred sectors such as IT, fashion, beauty, and content interlocks with commercial district growth, so it is worth watching whether it grows into one of Seoul's major business districts going forward."
