Changing Commercial Real Estate Market, Increasing Preference for Retail Spaces

Sales patterns of commercial stores are changing in the social distancing environment.

Before the COVID-19 pandemic, many people gathered in station areas or so-called “~ridan” streets, known as hot spots, for various reasons such as commuting and offline meetings. The number of floating populations was the biggest variable in store sales.

However, now that all sectors are facing a major turning point due to the involuntary reason of the disease outbreak, consumption patterns are also changing significantly beyond what was expected.

Consumption patterns, which had been gradually changing over the past few years, have recently accelerated rapidly. Broadly speaking, there are two main points: first, the increase in time spent at home due to changed working environments such as telecommuting and flexible work systems has greatly increased neighborhood consumption near homes; second, when choosing food, there is a stronger desire to consume for “oneself” compared to the past.

This can be analyzed as an effort to maintain self-esteem by raising one’s own value even a little in isolated living conditions.

This is evident from the personal credit card usage status by consumption type announced by the Bank of Korea. In the first half of last year, credit card payments in the dining industry decreased by 10.5% compared to the previous year. However, despite the overall sluggishness in the dining sector, high-end restaurants with an average spending of over 50,000 won grew by 20% in the first half of last year compared to the previous year.

Another phenomenon is that as the number of homebodies increases, more people are choosing bread instead of rice, leading to an unexpected increase in sales at bakery stores. Bread consumption is also showing polarization.

Even during homebound life, the increase in espresso machine and wine consumption to boast consumption for “oneself” shows that the tendency of young people who want to communicate and show off through SNS due to the cessation of offline meetings plays a role. Bakeries are also preferred for special bakeries rumored to be hot.

Newly leased commercial buildings also seem to recognize the changing meaning of commercial districts and are making efforts to attract customers who visit rather than just relying on floating populations.

They are trying to induce a simultaneous increase in the value of not only the building where the commercial complex is located but also the surrounding commercial district by pre-leasing stores with the ability to attract customers and revitalize the surrounding commercial area, called “key tenants.”

Among them, the “Eden City Officetel Complex Commercial Building,” which is about to be completed near Yadang Station, is attracting attention by confirming the entry of the French prestigious bakery “Gontran Cherrier” under an exclusive contract for Paju.

Gontran Cherrier is known for receiving attention on SNS with keywords such as “Bread Michelin,” “Bread Pilgrimage,” and “Bread Zone” in areas with high bakery consumption such as Gangnam, Bundang, and Ilsan. It is known as a place where young mothers who want to boast their lifestyle gather.

An official from Eden City sales said, “Due to the characteristics of the new town, the exclusive store in Paju, where the proportion of young consumers in their 30s and 40s with newlywed couples and young children is high, is also expected to have high preference.” He added, “Based on sales, there is no problem with rent payment, and many people interested in leasing commercial spaces are focusing their attention.”

Eden City, which has completed the exclusive franchise contract for Gontran Cherrier in Paju and is waiting for tenants, is located near Yadang Station in Paju. Interested parties can make a reservation and receive consultation.