"After Hotels Swapped Beds for Operating Tables..." Big Spenders Who Poured KRW 1.7 Trillion Reshaped Gangnam's Hotel Landscape [Real Estate A to Z]

Hospitals and clinics drive a 10-percentage-point drop in vacancy rates
Hotel rooms on floors 8 and 9 converted into treatment rooms
2.01 million foreign patients; KRW 1.7 trillion in spending

As the number of foreign medical tourists reaches 2 million, the landscape of commercial districts in Seoul’s Gangnam area and the revenue mix of major hotels are changing. Medical businesses are filling vacant retail spaces, while hotels are bringing clinics into their premises instead of using the space for guest rooms, making medical tenants a major force in the commercial real estate market.

According to “The Same Neighborhood, a Different Neighborhood: Medical & Gangnam Edition,” a report published by global real estate services firm Cushman & Wakefield Korea on the 13th, medical businesses accounted for just 27% of all stores in Gangnam at the end of 2025, but their sales jumped 80% from the previous year, driving spending in the commercial district. Their sales were 1.5 times the combined total for the five commercial districts of Myeongdong, Hongdae, Seongsu, Dosan Park, and Hannam.

A plastic surgery clinic is located in a building near Sinsa Station in Gangnam-gu, Seoul. Photo by Kang Jinhyung

The growth of medical businesses has contributed to a decline in the vacancy rate in Gangnam’s commercial district. The vacancy rate fell from about 23% in the fourth quarter of 2023 to about 13% in the second quarter of 2026. In 2025, the number of retail and service businesses in the district each declined by 3%, while the number of food and beverage businesses remained unchanged. By contrast, the number of medical businesses rose 5% year on year. The same trend is also evident in other commercial districts. Over the same period, medical sales in Myeongdong and Hongdae rose 110% and 295%, respectively, while the number of stores increased 25% and 14%, respectively.

The expansion of medical businesses has spread to hotels. Oakwood Premier Coex Center in Gangnam-gu, Seoul, has brought a clinic into about 1,650 square meters (500 pyeong) of space on its basement level 1. UH Suite Seoul Insadong in Jongno-gu was designed from the planning stage as a combined hotel-and-clinic complex. The Grand Lotte Seoul in Jung-gu converted some guest rooms on the eighth and ninth floors into medical spaces.

Cushman & Wakefield Korea said, “Medical tenants are diversifying hotel revenue streams by generating stable rental income from underused spaces while adding spending on F&B, retail, and beauty services linked to hotel stays. This could also raise expectations for higher asset values.”

Year-over-year percentage changes in sales and number of stores by business category in major commercial districts last year. Cushman & Wakefield

The report said that the sharp rise in foreign patients had driven up demand for medical services. In 2025, about 2.01 million foreign patients visited Korea, marking the first time the number exceeded 2 million. Their spending on medical tourism reached 1.7 trillion won.

Yoon Hwaseop, executive director and head of the Retail Leasing Group at Cushman & Wakefield Korea, said, “Medical businesses are now a key sector that goes beyond providing treatment space to boost both spending in commercial districts and the value of entire buildings. Building owners and hotel operators should view medical tenants not simply in terms of leasable area, but as a factor that can change the revenue structure of an entire asset.”

Yoon added, “The next phase of growth for medical businesses will depend less on where they move in and more on the demand they connect with. A leasing strategy tailored to the character of each commercial district will determine asset values going forward.”

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