Myeongdong Street Sees More Rental Inquiries... "It Will Truly Revive Only When the Sky Route Opens"

Myeongdong Street Sees Many People Out for Spring
Increase in Rental Inquiries Raises Hopes for Commercial Revitalization
Concerns Remain Over Limits of Tourist Demand

On the afternoon of the 12th, Myeongdong Street in Jung-gu, Seoul was visited. The central street, home to large stores, appeared to have regained its vitality due to the easing of social distancing measures and the warmer weather.
Photo by Hwang Seoyul

[Asia Economy Reporter Hwang Seoyul] With the easing of social distancing measures and growing expectations for the endemic phase (periodic outbreaks of infectious diseases), the streets of Myeongdong in Seoul are regaining their vibrancy. Myeongdong is a representative commercial district that experienced a sharp economic downturn following the outbreak of COVID-19. However, even within Myeongdong, there is a mixed atmosphere depending on whether businesses cater to domestic customers or foreigners.

On the afternoon of the 12th, the Myeongdong street in Jung-gu, Seoul was visited. Although it was a weekday daytime, the area was lively with people enjoying the spring sunshine in the bustling district. Nearby real estate agents unanimously reported a noticeable increase in inquiries about commercial space rentals since March. Myeongdong, where tourist demand accounted for most of the sales, had a vacancy rate of 50.1% for medium to large commercial spaces in the fourth quarter of last year. It is one of the most severely affected areas among Seoul’s major commercial districts.

However, local real estate officials explained that expectations are rising due to the easing of social distancing. Representative A of a real estate agency said, "There have been quite a few inquiries about renting commercial spaces, especially for large stores." The visit then turned to the central street of Myeongdong, where large clothing and shoe stores are concentrated. There appeared to be quite a few young people carrying paper shopping bags in both hands. The difference compared to just a few months ago was clearly noticeable. Even within Myeongdong, dining establishments near Euljiro, where many office workers are located, seemed livelier. Mr. Yoo (38), who runs a pub, said, "Even on weekdays, the outdoor tables are fully occupied during the evening."

The alley of Myeongdong 8-gil, just a short walk from the central street. Not a single person passed through the shops with rental inquiry stickers on their windows.
Photo by Hwang Seoyul

However, there are still places where the warmth of spring has not reached. This is because the tourist demand, which accounted for most of Myeongdong’s commercial sales, has not fully recovered. Mr. Joo Seongsik (60), who operates a small fashion accessory store, said, "It is true that the foot traffic has increased since March," but added, "It seems that the increased foot traffic has not extended to stores in sectors where foreign tourists accounted for most of the sales."

Despite the fact that rental prices in Myeongdong’s commercial district have decreased compared to before, there is still a large waiting demand hoping for further rent reductions. A representative from real estate agency B said, "There are businesses that would move in if the rent were lowered further from the current level." The rental price index for medium to large commercial spaces in Myeongdong in the fourth quarter of last year was 76.36, down 23.64 points from 100 in the fourth quarter of the previous year. The rental price index is calculated based on the cost required for leasing, with the fourth quarter of the previous year (100.0) as the baseline.

Park Daewon, director of the Commercial Property Information Research Institute, analyzed, "There are clear limits to domestic demand in the Myeongdong commercial district. While areas around office districts will recover quickly following the easing of social distancing, Myeongdong is expected to show a gradual recovery until tourism fully resumes."

This content was produced with the assistance of AI translation services.