Only Foreigners Are Swarming In... You Can't Even Run a Business Without 800 Million Won

[Financial News] On the morning of the 21st in Myeong-dong, Jung District, Seoul, the streets were packed with foreign tourists despite the steady rain. From people seated in restaurants to those coming in and out of shops, it was hard to find any Koreans. Cafes were already full of foreigners who had finished shopping before lunch. With foreign visitors pouring in, vacant storefronts were hard to find. When asked whether any empty spaces were available, a brokerage office replied that there were almost none in the main commercial area. A licensed real estate agent identified as A said, "Even in the outer areas of Myeong-dong, you need more than 800 million won just for key money and a deposit." He added, "Demand is so strong that landlords are now choosing tenants."
Myeong-dong, once called a "vacancy hell," is coming back to life. More foreign visitors are coming to Korea for K-pop, K-beauty and other attractions, and many of them are heading to Myeong-dong because of its easy access. Rents for buildings are also rising quickly.
According to the Korea Real Estate Board (KREB), the vacancy rate for medium- and large-sized commercial properties in Myeong-dong, which stood at 50.1% in the fourth quarter of 2021, plunged to 5% in the first quarter of this year. That is a drop of more than one-tenth in just four years and three months. Medium- and large-sized commercial properties are general buildings with three or more floors or a total floor area exceeding 330 square meters.
The Myeong-dong commercial district, which showed little sign of recovery throughout 2022 as vacancy rates stayed above 40%, began to rebound when the rate fell into the 20% range at the end of 2023. Since then, Korean culture such as Squid Game has spread around the world, driving a surge in tourists and cutting the vacancy rate to 11.2% in the first quarter of 2025 and 7.2% in the second quarter. According to the Ministry of Culture, Sports and Tourism (MCST), the number of foreign visitors to Korea in the first quarter of this year reached 4.76 million, the highest on record.
A tour of both the main commercial streets and the back alleys of Myeong-dong found no vacant stores at all. The only two empty spaces discovered were both under interior renovation.
As popularity has grown, rents have also climbed. According to the Seoul City Commercial District Analysis Service, building rent per 3.3 square meters rose from 220,254 won in the fourth quarter of 2024 to 250,833 won a year later, a sharp increase of 13.9%. First-floor rents, which are more sought after, rose 34.9% over the same period. The store closure rate has remained in the 1% range for three consecutive quarters.
A licensed real estate agent near Myeong-dong, identified as B, said, "To open a 40-square-meter store in the main commercial area, you need more than 2 billion won for the deposit and key money, and you should expect around 80 million won in monthly rent." He added, "This is not the Myeong-dong of the past, when business was slow."
kjh0109@fnnews.com Kwon Jun-ho Reporter