“As fashion brand stores are opening, the number of people on the street is increasing. In particular, young people are frequenting a lot.” (A representative from an A real estate agency in Gangnam, Seoul)
The Dosan-daero commercial area, one of the main business districts in Gangnam, Seoul, is showing a notable recovery, with a significant decrease in vacancy rates after a year. In particular, it is establishing itself as a fashion hub with the opening of various fashion brand stores and flagship stores.
According to the Korea Real Estate Board's commercial real estate rental trends report on the 17th, the vacancy rate for medium to large retail spaces on Dosan-daero in the third quarter of this year was recorded at 6.44%. This is a decrease of 10.64 percentage points compared to 17.08% in the third quarter of last year. While it increased slightly from the second quarter (2.52%), reactions from the field indicate that there has not been a significant change in perceived vacancy rates due to sample expansion and replacement as a result of resampling starting from the third quarter.
A representative from an A real estate agency near Dosan-daero in Gangnam, Seoul, noted, “Recently, the vacancy rate has been stable with little change,” adding that “there haven't been many inquiries about sales or purchases either.”
Dosan-daero has relatively lower rental prices compared to Hannam-dong and Cheongdam-dong, leading to an increasing trend of brand flagship stores. It is evaluated as emerging as a fashion hub, not only with large fashion brand stores but also with smaller brand stores opening. Domestic designer brands such as Songzio, Woo Young-mi, and Jun Ji operate flagship stores here, and globally known street fashion brands like Supreme and Stüssy have also opened stores targeting the MZ generation.
Around 4:30 p.m. on the 16th, visitors in their 20s and 30s were seen browsing various brand stores in a retail alley on Dosan-daero that the reporter visited. A pop-up store had even formed a queue.
A representative from a B real estate agency on Dosan-daero said, “Since around a year ago, large fashion brand stores have opened, creating a ripple effect with stores trying to promote their brands,” and noted that “the lower rental prices compared to Garosu-gil have also had an impact.”
According to the Korea Real Estate Board, the rental price per 3.3 square meters in the medium to large retail spaces in the Dosan-daero commercial area was 183,371 won in the second quarter, which is relatively lower compared to 303,194 won in Sinsa Station and 204,345 won in Cheongdam.
The future outlook for the Dosan-daero commercial area is mixed. There is a projection that the area will improve temporarily due to synergistic effects with the nearby Apgujeong Rodeo Street. However, some local brokers are concerned that the high rental prices set by large fashion brands may make it difficult for small businesses to access the area.
Song Seung-hyun, CEO of Urban and Economic, stated, “While it is for brand promotion, it also generates revenue through marketing, and just the fact that there are no vacancies on the first floor of the main street should be seen positively for the commercial area,” adding that “particularly, with the activation of the food and beverage sector in Apgujeong Rodeo, there is a synergistic effect with the Dosan-daero commercial area.”
Go Jun-seok, a professor at Yonsei University’s Sangnam Management Institute, remarked, “As the rental prices in the Apgujeong Rodeo area have decreased significantly and the consumer population is gathering, nearby fashion brands on Dosan-daero are also being affected,” and added that “the rental prices are also relatively lower compared to Garosu-gil, so it seems likely to maintain low vacancy rates for a while.”
On the other hand, a representative from a C real estate agency on Dosan-daero stated, “Although there are fewer vacancies compared to other commercial areas, the recent economic situation is quite challenging, and if rental prices rise later, fashion brands may relocate, which could hit the local economy hard.” They noted that “for the commercial area to be activated, there need to be small businesses, but with the recent entry of brand stores leading rental prices to rise, small businesses are unable to come in.”