Commercial decline worsens in Seoul's university areas

The entrance of a building on the road in front of Hongik University, Mapo District, Seoul is covered in graffiti on March 17, suggesting it has been vacant for a long time. / Korea Times photo by Lee Seo-hyun

Once business hubs bustling with youth, the commercial districts surrounding Seoul's major universities, including the areas near Hongik University and Ewha Womans University, are facing an unprecedented downturn.

Over the past decade, these neighborhoods, known for their vibrant mix of affordable eateries, independent shops and cultural spaces, have seen a dramatic increase in vacancy rates, signaling a profound shift in the urban landscape and consumer behavior.

The decline began in the early 2010s, as emerging consumer destinations like Yeonnam-dong diverted foot traffic away from traditional university commercial districts. The situation worsened following the 2017 THAAD missile defense system deployment, which led to a sharp decrease in Chinese tourists, a key consumer base for these areas. The COVID-19 pandemic further exacerbated the decline, reducing the student population's demand, which has yet to recover.

On the afternoon of March 17 in front of Hongik University in Mapo District, Seoul, a real estate agent said, "Even the Hongik University area, known as a prime location, is struggling," citing the ongoing economic downturn and high rental rates as key reasons for the decline in both merchants and customers.

A deserted street near Ewha Womans University in Seodaemun District, Seoul, where not a single store is open for business. / Korea Times photo by Lee Seo-hyun

The commercial vitality of formerly trendsetting college areas is eroding. Districts around Ewha Womans University, Hongik University, Korea University and Konkuk University have lost their dynamism, primarily due to soaring rents.

Additionally, the rise of new and large commercial areas like Seongsu-dong and Cheongdam-dong, coupled with the loss of unique characteristics in university districts, has led to consumer disinterest. For instance, the "Ewha Womans University Street," once hailed as a sanctuary of women's fashion, now has 11 vacant storefronts along a 300-meter stretch.

The situation is similar in the Sinchon area, where "for rent" signs are increasingly common along Yonsei Road, linking Sinchon Station and Yonsei University. A Yonsei University graduate, Kim, 27, reminisced about the days when the Sinchon and Ewha areas were overflowing with shops, noting the feeling of losing even the memories of those times.

Statistics confirm the decline of these commercial areas. According to the Korea Real Estate Board, the vacancy rate for small commercial properties in Seoul was 5.8 percent in the last quarter of 2023, while the rate in the Sinchon and Ewha areas was nearly three times higher at 18.3 percent. Although this is a slight decrease from the previous quarter's 22.0 percent, it's a stark contrast to the zero percent vacancy rate recorded from the second quarter of 2015 for over two years.

A "for rent" sign is displayed on a building on Yonsei Road in Seodaemun District, Seoul. / Korea Times photo by Lee Seo-hyun.

Misguided policies have also played a role, exemplified by Seoul Metropolitan Government's failed attempt to develop the area in front of Ewha Womans University into a shopping and tourism district, which only led to further decline as online shopping reduced the demand for bricks and mortar apparel stores.

Experts argue that for commercial districts surrounding university areas to survive, they must differentiate themselves from franchise-dominated landscapes and large shopping malls that continually reinvent themselves to attract young consumers. The homogenization of commercial offerings in these areas has made them less appealing, highlighting the need for a return to distinct, local identities to draw customers back.

Real estate agents and local business owners are deeply concerned about the future. "The demand for shops has definitely decreased," said a real estate agent identified only as Kim. "Even Hongdae, known for its prime location, is struggling as the economic downturn continues while rental prices remain high, deterring both merchants and customers."

Professor Lee Eun-hee of Inha University's Department of Consumer Science suggests that for university commercial districts to survive, they must innovate and differentiate themselves.

"Large shopping malls, with the capital to frequently renovate and attract the younger generation with newness, are drawing consumers away. The polarization between these large commercial areas and university districts is likely to worsen unless the latter can carve out a unique niche," she said.

The current state of these once-vibrant neighborhoods is a poignant reminder of the rapid pace of change in urban economies and consumer behavior. As these areas grapple with the challenges of revitalization, the need for innovative solutions and a reimagining of their identities and offerings has never been more critical.

This article from the Hankook Ilbo, a sister publication of The Korea Times, was assisted by generative AI and edited by staff at The Korea Times.