Seongsu: Not Just a Hotspot for Foreign Tourists, Office Transactions Surge by 300%

"Cluster Formed as IT, Fashion, and Entertainment Companies Gather"
Most Tenant Companies Operate B2C Business Models
Rising Seongsu Office Prices Limiting Influx

Exterior view of the Gentle Monster headquarters, II Combine building in Seongsu-dong. Photo by Lee Jungyoon

"Could you take a picture with the building in the background, please?"

On March 27, Seongsu-dong 2-ga, Seongdong-gu, Seoul. The entrance of the II Combine headquarters building of the eyewear brand Gentle Monster, which has become a 'hot place' among foreigners, was bustling with tourists. People were taking photos with the headquarters building, known as 'Gentle Monster House Nowhere Seoul,' which opened in September last year, as the backdrop for their social media posts. The II Combine building, with a total floor area of 30,700 square meters and 14 above-ground floors, stands out from a distance thanks to its protruding concrete exterior. One tourist said, "I've always been interested in the Gentle Monster brand, so I visited the headquarters while in Seongsu-dong. The building is grand and its unique exterior makes for great photos, so I plan to upload them on Instagram." After taking pictures outside, the inside was crowded with people eager to see the installation art and Gentle Monster products on display. This phenomenon has occurred as more companies have moved into the area.

Seongsu-dong is transforming beyond being a tourist destination for foreigners into an office district. This trend is attributed not only to the increasing number of trend-sensitive floating populations but also to the growing use of buildings and offices as a means of conveying brand identity. The virtuous cycle, in which the influx of companies and people leads to new office demand, is becoming increasingly evident.

The growth rate of office transactions in Seongsu-dong has far outpaced those of Seoul's core districts, including the central business district, Gangnam, and Yeouido. According to commercial real estate consulting firm NAI Korea on March 31, the volume of office transactions in Seongsu-dong has increased by more than 300% over the past two years. Due to the impact of interest rate hikes and other factors, the transaction volume in 2023, which marked the lowest since 2020, was KRW 12.22 billion. However, in 2024, it increased to KRW 36.75 billion, and last year it reached KRW 49.93 billion. The average annual transaction growth rate over the past two years was 308.6%. In the Gangnam Business District (GBD), Gangnam-gu saw transactions increase from KRW 146.72 billion to KRW 422.22 billion, a 187.8% rise. In the Yeouido Business District (YBD), Yeongdeungpo-gu saw an increase from KRW 34.4 billion to KRW 98.54 billion, a 186.5% jump. Although the absolute transaction amounts in Seongsu-dong are smaller, its growth rate is the steepest. In Jongno-gu, part of the Central Business District (CBD), transactions rose by 34.2% over the same period, from KRW 203.36 billion to KRW 272.98 billion.

Major companies have already begun relocating their headquarters to Seongsu-dong. Krafton, the game developer famous for PUBG (PlayerUnknown’s Battlegrounds), is constructing its new headquarters on the site of the former E-Mart Seongsu branch. The new building will have eight underground floors and 17 above-ground floors. Krafton plans to create 'Krafton Town,' a complex featuring workspaces, employee welfare facilities, and customer experience zones. Krafton is known to own seven buildings in the surrounding area.

In 2022, fashion company Musinsa relocated its headquarters from Gangnam-gu to Seongsu-dong. Musinsa also operates about 10 offline stores in the area, including 'Musinsa Store Seongsu.' The company even participated in and won the naming rights for the Seongsu subway station on Line 2, allowing the station to also be called 'Musinsa Station.' In addition, SM Entertainment has moved into the D Tower in Seongsu-dong from Gangnam-gu, and the car-sharing company SOCAR is also located in the same building.

Across from Seoul Forest, a new mixed-use complex will be built on the Sampyo Remicon site, featuring office, accommodation, cultural, and retail facilities in a 79-story building. The total floor area will be about 48,000 square meters, with construction expected to begin as early as the end of this year.

Earlier, in January, the Seoul Metropolitan Government held an Urban Planning Committee meeting and expanded the designation of the 'Seongsu IT Industry and Distribution Development Promotion District' to cover the entire quasi-industrial area. The city also announced plans to add the cultural content industry as a recommended industry and develop the area into a business district combining IT-centric and content-focused industries.

Construction site of Krafton’s new headquarters in Seongsu-dong. Photo by Lee Jungyoon

Companies based here are paying particular attention to their building exteriors. The new Krafton headquarters is being designed by David Chipperfield, a renowned architect and Pritzker Prize winner. The design will feature a vertical structure and seasonal landscape lighting. This reflects the fact that most tenant companies have business models focused on B2C (business-to-consumer) transactions. With rapid trend changes and a large floating population, including many foreigners, companies are establishing offices in Seongsu-dong to promote their brands and analyze trends. A business owner running a fashion and studio company in Seongsu-dong commented, "We set up our office in Seongsu-dong to install our products in an open studio and advertise to the large floating population. Given the characteristics of our industry, being in a bustling area is a significant advantage, as we are sensitive to trends and word-of-mouth."

This is creating a virtuous cycle that draws in related companies. After Musinsa relocated its headquarters to Seongsu-dong, select shops opened in the surrounding area, followed by the global fashion brand ADER error moving its office there as well. Musinsa is also building the Studio Seongsu branch, forming a cluster where all industry activities, from planning to distribution and marketing, take place in one place. Companies are relocating their offices to benefit from this agglomeration effect. According to Seoul city data, the number of businesses in Seongsu-dong with more than 100 employees has steadily increased, rising from 114 in 2021 to 137 in 2024—a more than 20% increase in three years. During the same period, the number of companies with more than 100 employees in Seongdong-gu rose from 158 to 188.

Jung Eunsang, head of the NAI Korea Research Center, commented, "The demand for office space in Seongsu-dong is extremely strong. As IT, fashion, and entertainment companies have clustered together, a business cluster has formed, and now companies are willing to pay a premium to move in for the agglomeration effect." He added, "When innovative companies gather in one place, talent naturally follows, trend information is exchanged, and collaboration opportunities arise."

However, rising office prices in Seongsu-dong are seen as a factor that could limit the influx of companies. As a result, demand for office space is expected to shift from startups to mid-sized and large businesses. Fifteen years ago, land prices in Seongsu-dong were around KRW 20 million to KRW 30 million per pyeong (3.3 square meters). Now, in the core office area, some transactions exceed KRW 300 million per pyeong. In August last year, a three-story building with a land area of 37 pyeong (124.3 square meters) and a total floor area of 91 pyeong (302.1 square meters), located between Ttukseom Station and Seongsu Station on Line 2 in Seongsu-dong 1-ga, reportedly sold for KRW 13 billion.

Jung further noted, "In the past, companies moved to Seongsu-dong because of the low prices, but now a significant premium is attached, making it more like Teheran-ro in Gangnam, where you need to pay a lot to relocate. As a result, the companies driving demand for Seongsu-dong offices are increasingly limited to mid-sized businesses or larger."

Yoon Sumin, real estate specialist at NH Nonghyup Bank, said, "Office prices in Seongsu-dong have risen so much that they now rival those in Gangnam and Yeouido, forcing small and medium-sized businesses to look for alternatives such as Magok Industrial Complex. With significantly higher rents, demand is shifting to companies, such as large corporations, that can afford to invest in office space."

This content was produced with the assistance of AI translation services.