'High-Rise Buildings + Nopo' Hipjiro Commercial District Also Slows Down Due to COVID-19

Q2 Euljiro Commercial District Medium-to-Large Store Yield at 1.21%
Down 1.12 Percentage Points from a Year Ago
District Sales Also Below Jung-gu Average
"Nearby Long-Established Stores Also Saw Profit Declines Due to COVID-19"

[Asia Economy Reporter Onyu Lim] 'Euljiro' stretches from Seoul City Hall in Jung-gu, Seoul to the three-way intersection in front of Hanyang Technical High School. It is a representative business district of Seoul, while also housing old and shabby traditional shops scattered throughout. Recently, people in their 20s and 30s have called it "the hippest place ever," earning it the nickname 'Hipjiro' on social networking services (SNS).

However, Euljiro was not spared from the impact of the novel coronavirus disease (COVID-19). According to the Commercial Information Research Institute on the 1st, the investment yield of medium-to-large commercial properties in the Euljiro commercial district in the second quarter was 1.21%. This is a decrease of 0.73 percentage points compared to the first quarter's investment yield of 1.94%. It also dropped by 1.12 percentage points compared to 2.33% in the same period last year.

A downturn can also be seen in sales within the commercial district. The Commercial Information Research Institute examined coffee shop sales in the Euljiro vicinity using SK Telecom's big data service platform GeoVision statistics. As of August, the average estimated sales were 20.43 million KRW. This was 24.57 million KRW lower than the average estimated sales of 45 million KRW in Jung-gu, Seoul, where the commercial district is located.

The average payment amount per visit to coffee shops in the Euljiro commercial district was 9,983 KRW, which was 1,456 KRW higher than Jung-gu's average payment of 8,527 KRW. Researcher Hyuntaek Cho of the Commercial Information Research Institute explained, "From this, it can be understood that the reason for the low coffee shop sales in the Euljiro commercial district is due to fewer visitors to the stores."

However, the floating population in the commercial district is relatively large. As of August, the monthly average floating population in the Euljiro vicinity was 130,859. This means that approximately 4 million people visit the Euljiro commercial district monthly (based on 30 days).

Euljiro in Jung-gu, Seoul, which was once filled with young people in their 20s and 30s, is now quiet due to COVID-19. Photo by Han Seung-gon

Researcher Hyuntaek Cho of the Commercial Information Research Institute analyzed, "Euljiro hosts various companies and is densely packed with specialized commercial districts and tourist attractions, creating a good commercial atmosphere that attracted many visitors regardless of age group. Recently, traditional shops near Euljiro have become a major topic among young people, improving the commercial district's atmosphere, but due to the spread of COVID-19, store sales within the district have decreased."

He added, "Currently, many people, including office workers, still visit Euljiro, but consumption is not happening well. This commercial district downturn is expected to continue for the time being."