Lotte Shopping(023530) said on the 1st that it was selected as the new user in the bid for permission to use commercial facilities at Yeongdeungpo Station in Seoul conducted by Korea National Railway. As a result, Lotte Department Store Yeongdeungpo, which opened in 1991, will continue operating for at least the next 10 years. The country's first privately funded station department store, which had even faced closure rumors, has breathed a sigh of relief.
The result came half a year after the call for bids began in Feb., following four rounds of bidding. The initial minimum annual rent proposed by the railway corporation was 28.7 billion won, but no corporations submitted proposals, and after three consecutive failures, the reserve price went down to 25.83 billion won and then to 22.96 billion won in the fourth bid. Lotte Department Store participated alone in this fourth bid. Although the final winning price was not disclosed, with no competitors, it appears to have been decided not far from the minimum price of 22.96 billion won. It is lower than the 25.15 billion won that Lotte bid in 2019.
Behind Lotte skipping three rounds of bidding was a deteriorated revenue structure. Sales at the Yeongdeungpo store fell 33% from 467.1 billion won in 2019 to 314.6 billion won last year, but rent increased, creating a structure in which about 10% of sales went to fixed costs. With the 2021 opening of The Hyundai Seoul in Yeouido, competition with Shinsegae Department Store Times Square within a five-minute walk, and store aging overlapping, the store, which ranked in the national top 10 in department store sales in the mid-2000s, has recently fallen to around the 30s.
Lotte operated the Yeongdeungpo store for 30 years after receiving occupancy permission from the government in 1987. When the occupancy period ended at the end of 2017, the building reverted to the state, and afterward the arrangement changed to paying rent to the railway corporation. In June last year, Lotte Department Store voluntarily returned the remaining contract (2025–2029) and opted to rebid, judging that it was difficult to decide on large-scale investment under five-year contracts.
In the retail industry, the view is that Lotte Department Store, having secured a 10-year operating right at a reasonable rent level, will move to a large-scale renewal. The task is to overhaul the aging floors that could not be touched due to contract uncertainty and win back customers in their 20s and 30s who shifted to Shinsegae Times Square. Yeongdeungpo Station is a major transportation hub used by millions monthly, with the Sinansan Line scheduled to open in 2027 and more than 90 maintenance projects, including redevelopment and reconstruction, underway across Yeongdeungpo District—factors cited as reasons Lotte did not give up the site.
A Lotte Department Store official said, "Now that we have secured a stable operating period, we will enhance Yeongdeungpo's competitiveness through differentiated MD and make it the leading department store in Seoul's western commercial area."