[Home Tech] Content Matters More Than Emerging Commercial Districts

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Young men and women are walking on the streets of Seongsu-dong. Provided by Seongdong District Office

There is a saying in Korea: "The location is good." In the past, administrative hubs were established at convenient transportation points for collecting taxes or moving goods, and these naturally became places where people gathered and business thrived. Over time, this expression came to refer to the core locations of commercial districts-spots where business is good. A good location used to mean good business.

Today, however, a prime location no longer guarantees a successful commercial district. In the second quarter of this year, the average vacancy rate in major commercial districts in Seoul was 15.2%. This was a 0.1% increase from the previous quarter, but a 0.8% decrease compared to the same period last year. While the situation has not significantly worsened, the vacancy rate remains burdensome. There are clear contrasts between different commercial areas. Garosu-gil in Sinsa-dong had the highest vacancy rate at 43.9%, while Cheongdam-dong saw its rate drop to 13.4% thanks to new luxury brand openings. Myeong-dong, which was once almost deserted, saw its vacancy rate fall to 4.9% due to a recovery in foreign tourists, and Seongsu-dong settled as the most stable commercial area with a rate of 3.4%.

These recent trends in vacancy rates by district cannot be explained simply by location or foot traffic. Even within the Gangnam area, Cheongdam-dong has regained its vitality, but nearly half the shops on Garosu-gil remain empty. Just a few years ago, Seongsu-dong was still seen as an industrial zone. Now, with the influx of cafes, select shops, and brand collaboration spaces, it boasts the lowest vacancy rate. Location is no longer the absolute factor determining the success or failure of a commercial district.

Content has become more important than location. Shifts in consumer trends have also increased the importance of content. In the past, where you bought something mattered most, but now the kind of experience you have holds greater value. Millennials & Gen Z place more emphasis on experiences and sharing than on simple purchases. They seek out spaces worthy of sharing on social media, events where they can interact with brands, and pop-ups available only for a limited time. The drawing power of a commercial district now depends not on foot traffic, but on how long people stay and what they share-in other words, the power of content.

Seongsu-dong panorama. Asia Economy DB

Seongsu-dong demonstrates this most clearly. Beyond being just a street of cafes, global brands are rushing to open pop-up stores, causing rents to soar. While regular restaurant rents remain around 400,000 won per pyeong, stores offering experiential content exceed 1 million won per pyeong. The area near Gangnam Station shows a similar pattern. Even in the same location, alleys filled with beauty and healthcare content command rents that are 30-40% higher than areas concentrated with regular restaurants.

In particular, the "pop-up store" stands out as an icon of the content era. A pop-up is not just a store-it is an event and an experience. Thanks to its limited-time exclusivity and the viral power of social media, pop-ups succeed even with high rent costs. In Seongsu-dong, Hannam, and around Apgujeong Galleria, crowds gather whenever famous brands hold pop-ups, raising rental expectations for the surrounding commercial areas as well.

Building owners and investors need to change their strategies. Long-term value growth through the concentration of content has become more important than short-term rental income. Financial institutions and investors have already begun to closely examine content-related risks. Real Estate Investment Trusts (REITs) and commercial real estate funds now consider not just location, but also the potential for brand collaboration and the sustainability of content as key evaluation factors. The era of simply leasing out space is over; the ability to create value by turning space into content now determines investment performance.

Going forward, what will determine the success or failure of a commercial district is not "where it is located," but "what it offers." Those who understand the ecosystem and collaborative structures needed to plan and deliver trending content-rather than simply chasing after rising districts-will become the winners in the market. Even if the location is somewhat disadvantageous, adding differentiated content and experiential strategies can transform it into a land of new opportunities.

Hyosun Kim, Chief Real Estate Specialist, NH Nonghyup Bank