[New Commercial Real Estate Map] Why Companies Dominating Gangnam Are Moving to Gangbuk

Luxury Companies Long Established in Cheongdam-dong Show Recent 탈Gangnam Trend
New Headquarters Move to Seongsu and Yongsan
"Gangnam and Pangyo Rent Too High, Large Vacancies Hard to Find"
"Trend Shifting to Gangbuk... Some Buy Land Directly to Increase Real Estate Value"

Centropolis Building, Jongno-gu, Seoul. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Kim Hyemin] Companies that used to stick exclusively to Gangnam in Seoul are now gathering in Gangbuk areas such as Gwanghwamun, Seongsu, and Euljiro.

This is because companies that have grown since the COVID-19 pandemic have been moving toward Gangnam and Pangyo in Gyeonggi Province, making it difficult to find large vacant spaces. The trend has spread from Gangnam to areas like Seongsu, changing perceptions of Gangbuk offices as well.

According to the industry on the 9th, it has become easy to find companies that have relocated their headquarters from Gangnam and Pangyo to Gangbuk offices recently. In particular, luxury brands, which have traditionally been mainstays in Gangnam, are drawing attention by moving en masse to Gangbuk. These companies have long established themselves around Dosan-daero in Gangnam, an area frequented by high-income groups, emphasizing their premium image.

Givenchy Korea, a French luxury brand headquartered on Dosan-daero in Gangnam-gu, moved its headquarters to K-Square City near Gwanghwamun Station on Subway Line 5, along with other brands under Louis Vuitton Mo?t Hennessy (LVMH). Valentino Korea, which had its headquarters in Cheongdam-dong since 2014, relocated to Centropolis in Gongpyeong-dong, Jung-gu in 2020. Chanel Korea already has its headquarters in Pacific Tower, Seosomun-dong, Jung-gu. The global fashion group OTB, which owns brands such as Maison Margiela and Marni, established OTM Korea in the first half of this year and set up its headquarters in Concordian, Sinmunno 1-ga, Jongno-gu.

Fashion brands that have grown targeting the MZ generation (Millennials + Generation Z) are choosing Seongsu as the location for their new offices. Musinsa purchased a 3,300㎡ site in Seongsu-dong 1-ga, Seongdong-gu, and is currently constructing its office building. Fashion eyewear brand Gentle Monster is also building a new office in Seongsu-dong. HYBE, the entertainment company representing BTS, moved its headquarters from Daechi-dong, Gangnam-gu to Yongsan in March while constructing a new office building.

Source: JLL Korea

The reason they are choosing to leave Gangnam is ironically because Gangnam offices remain highly popular. As rents in Gangnam and Pangyo have risen sharply and vacancies have become scarce, more companies are opting for relatively cheaper and larger Gangbuk offices. For example, Givenchy Korea originally had no plans to leave Dosan-daero, but one of the main reasons for relocation was that there was no building in Gangnam that could accommodate both Givenchy Korea and multiple LVMH fashion brands.

There is no longer a strong reason to insist on Gangnam. As Hannam-dong and Seongsu-dong have emerged as major consumption areas for the MZ generation, the trend in consumer flows has expanded beyond Gangnam to Gangbuk as well. In particular, Seongsu-dong has become a center of fashion and consumer trends, and the industry views it as having sufficient future potential customers.

Another key reason is that companies are purchasing land directly rather than leasing offices, aiming to benefit from the increase in real estate value by constructing their own buildings. Most Gangnam offices are over 20 years old and aging, and there is no land available for new construction, so companies wanting their own headquarters are choosing alternatives like Yongsan or Seongsu.

A representative from RSquare, a commercial real estate data specialist, said, "It is partly because there are no vacancies suitable for Gangnam, but seeing luxury brands choosing Hannam and Seongsu suggests that perceptions of Gangbuk have changed compared to the past. Prime-grade offices in Gangbuk seem to be better than Gangnam buildings of similar price in terms of environment and facilities. For the same price, companies can upgrade the class of their building."