Major reconstruction complexes in Seoul are one after another choosing to carve existing shopping malls out of the project scope or to allocate apartments to shopping mall owners and not build new shopping malls. They judged it better to speed up the project by reducing vacancy risks and conflicts among owners than to rely on sales income from shopping malls. Some sites are increasing dwellings where shopping mall space has been reduced.
According to the maintenance industry on the 22nd, Mok-dong New Town Complex 8 in Yangcheon-gu, Seoul received approval to establish a reconstruction association in April on the premise of land partition for the existing shopping mall site. As agreement could not be reached with shopping mall owners over conditions such as apartment allocation, it was decided to separate the existing shopping mall from the maintenance project scope.
The reconstruction promotion committee for Mok-dong Complex 8 passed the proposal to exclude the shopping mall in December last year with 95.6% in favor. At the association's inaugural general meeting in February this year, the proposal to demand partitioning of the co-owned shopping mall site passed with 96.8% in favor. The Urban Maintenance Act stipulates that even if a land partition lawsuit has not concluded, approval to establish an association may be granted if certain conditions are met.
At the time, the shopping mall owners' consent rate for reconstruction was around 25%. The shopping mall side demanded participation in selecting an appraisal firm, external profitability verification, and a ban on discrimination when allocating apartments, but the promotion committee judged that some demands lacked legal basis. The complex is pursuing reconstruction to build up to 49 stories, 1,881 households, and neighborhood living facilities.
How to handle shopping malls varies by complex. Garak Plaza Apartment in Songpa-gu and Yeouido Jinju Apartment in Yeongdeungpo-gu separated the existing shopping mall sites from the maintenance project scope. Garak Miryung Apartment in Songpa-gu, Gaepo Jugong Complex 5 in Gangnam-gu, and Jamsil Wooseong 4th in Songpa-gu chose to include shopping mall owners in the project but not build new shopping malls.
Jamsil Wooseong 4th had expected to raise about 8.2 billion won through general sales of shopping mall units but scrapped the construction plan. They judged it better to reduce the burden of unsold units, vacancies, and maintenance fees after completion, even if it meant giving up immediate income.
There are business sites that reduce shopping malls and increase dwellings. Yeouido Jinju Apartment excluded a shopping mall site of about 1,600㎡ and concentrated floor area ratio on the remaining land to draw up a revised plan for up to 57 stories and 602 households. That is 24 more households than the original plan. Noryangjin District 1 cut shopping mall space from 13,879㎡ to 7,801㎡, and Noryangjin District 3 also reduced shopping mall space by 3,709㎡ to expand housing sale area. Noryangjin District 4 eliminated shopping malls from the new facilities.
Moves are also emerging to pull the exclusion card before conflicts over shopping malls drag on and to finalize whether to participate in the project. Garak Wooseong 1st in Songpa-gu passed a proposal to exclude the shopping mall in Nov. last year, with a condition to reinstate the shopping mall if the required consent rate is secured by the time of applying for association establishment approval. As withdrawals and re-consents by shopping mall owners repeated, the measure was to decide on project participation by a certain point.
In the draft maintenance plan for the Olympic Athletes' Village Apartment, the Olympic Plaza Shopping Mall and the sports center in the middle of the complex are also left out. The promotion committee says including these facilities could delay the project due to separate consent, appraisal, and disputes over association membership eligibility. However, the exclusion of the shopping mall has not yet been finalized. The shopping mall side says more than 60% of owners agreed to integrated reconstruction and is demanding inclusion in the maintenance zone.
Behind associations reducing or eliminating shopping malls is a slump in the shopping mall market. According to the Korea Real Estate Board (REB), the vacancy rate of collective shopping malls in Seoul rose from 8.3% in the third quarter of 2023 to 9.3% in the third quarter of 2025. According to GGAuction, the number of court auction cases for apartment shopping malls in Seoul last year was 141, up 41% from the previous year. If shopping malls fail to sell, associations must bear loan interest, maintenance fees, and taxes.
A construction industry official said, "These days, even if prices are cut, shopping malls within complexes are hard to sell, and even when they go to auction, it is not easy to find buyers," and added, "More associations will choose project speed over shopping mall sales income." The official continued, "If the existing shopping mall is removed from the project, an old building may remain next to the new complex, or daily convenience facilities may become insufficient, so location and commercial district should be carefully considered."