Reconstruction and redevelopment projects are reshaping not only residential areas but also the consumption landscape in cities. The influx of residents into large complexes and improvements in infrastructure are attracting more people to surrounding commercial areas, while the demand for new housing is expanding everyday consumer spending, highlighting new growth factors for offline retail.
On May 17, an analysis of statistics from Seoul's commercial area analysis service revealed a significant increase in the 'floating population' around major urban redevelopment sites in the past five years. The floating population refers to individuals who reside or spend time around streets and buildings, serving as a key indicator for commercial area analysis.
The most notable increase was observed in Dunchon-dong, Gangdong-gu. The floating population in Dunchon-dong rose from approximately 5.44 million in the fourth quarter of 2020 to about 7.92 million in the fourth quarter of 2025, marking a 45.5% increase. During the same period, estimated sales in the area grew from around 85.2 billion won to approximately 101 billion won, an increase of 18.6%.
Dunchon-dong is set to see the completion of the Olympic Park Foreon, a large-scale complex with 12,032 units, starting in late 2024. The influx of residents, along with increased demand for moving and living services, new commercial facility users, and consumer spending from the surrounding residential areas, has contributed to the growth of the local market. However, the sales growth rate remains lower than the increase in the floating population, indicating that it may take more time for commercial facilities to establish themselves and for consumer spending to solidify.
In Imun-dong, Dongdaemun-gu, the floating population increased from about 4.90 million to 6.84 million, a rise of 39.4%. Estimated sales in the area grew from approximately 112.1 billion won to about 142.1 billion won, a 26.8% increase. Imun-dong is experiencing a transformation as new residents from the Raemian La Grande, a redevelopment project in the Imun 1 redevelopment promotion zone, began moving in January 2025, adding a new consumer base to the existing mixed-use commercial area.
Conversely, in Jamwon-dong and Gil-dong, sales growth outpaced population increases. In Jamwon-dong, Seocho-gu, the floating population grew by only 9.9%, from 6.48 million to 7.13 million, while estimated sales surged from about 245.3 billion won to approximately 329.4 billion won, a 34.3% increase. This growth is attributed to the influx of residents from the Maple Xi, a redevelopment project in the Shinbanpo 4 district, combined with increased demand for high-end housing along the Han River.
Gil-dong in Gangdong-gu saw a floating population increase of just 8.0%, but estimated sales rose from about 318.5 billion won to approximately 425.6 billion won, a 33.6% increase. Gil-dong is interpreted as an area absorbing demand from the large-scale developments in Dunchon-dong and new housing in the Gangdong area rather than being a direct focus of major redevelopment projects.
Overall, the impact of redevelopment projects on commercial areas has not been uniform. In areas like Dunchon-dong and Imun-dong, large-scale developments have initially attracted more residents, while in Jamwon-dong and Gil-dong, sales have responded more rapidly despite smaller population increases.
Industry experts suggest that redevelopment projects are not merely about increasing housing supply but are fundamentally changing the structure of commercial areas. In the past, concerns about vacancies and commercial stagnation were prevalent during the early stages of reconstruction. However, recent trends show that after large-scale developments, consumer populations are recovering, leading to a restructuring of commercial areas focused on franchises, essential services, healthcare, educational institutions, and large retail facilities.
Nonetheless, there are concerns that rapid development without buffer zones could lead to stagnation in existing, aging commercial areas. The redevelopment project in the Hannam 3 district in Yongsan is a prime example. This large-scale redevelopment site began demolition in February 2025 and is expected to create a complex with 5,988 units. As demolition and relocation progress, local merchants report that commercial facilities and shops within the area are already closing at a rapid pace.
While the commercial area around Itaewon Station, which has recently attracted a lot of foot traffic, has been relatively less affected, the existing commercial zones deeper within the district are experiencing significant gaps. Even if new commercial areas are established post-redevelopment, it remains uncertain whether existing merchants can cope with rising rents and the changing consumer landscape to re-enter the market.
A commercial leasing representative in Jangwi-dong, Seongbuk-gu, noted, "During construction, there is often a temporary downturn, and after residents move in, the structure of the floating population frequently changes. There are also many cases where the commercial structure and shops themselves undergo significant changes. Especially in the case of large complexes with around 10,000 units, a new consumption zone akin to a new town is formed, leading to disparities in commercial growth depending on local characteristics."
* This article has been translated by AI.
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