Why Garosu-gil Became a 'Ghost Alley' with 40% Vacancy Rate

[Min Jae Lee, Anchor] Garosu-gil was once considered one of the hottest places representing Seoul's Gangnam area. But now it's said to have turned into an eyesore, completely empty.

[Kyung Pyo Hong, Reporter] Garosu-gil, located near Sinsa Station on Seoul Subway Line 3, was once one of the most thriving commercial districts in Seoul. There was a time when it was always crowded with people and established itself as a fashion hub. I remember suggesting to meet friends at Sinsa Station's Garosu-gil for unique, trendy gatherings. But now, it's completely empty. It reminded me of a ghost town. It was hard to find any trace of its past glory, and I was shocked by how severe the situation had become.

I visited Garosu-gil myself, and as you can see on the screen, it was so empty that you might doubt whether this is really a bustling area in Seoul's Gangnam. It was so deserted that even those who came would be scared and go elsewhere. There were "For Rent" signs everywhere, giving the impression that the commercial district was completely paralyzed.

As of the fourth quarter of last year, this area had the highest vacancy rate among major commercial districts, at a staggering 41.2%. This means that 4 out of 10 stores were empty, but in reality, it felt like almost no stores were open except for a few. Even at the iconic Apple Store in Sinsa-dong, I heard that there are often more staff than customers.

[Anchor] Still, Garosu-gil used to be a trendsetting place. It seems far from its past glory now.

[Reporter] I visited Garosu-gil and met with merchants, and the prevailing story was that the past Garosu-gil was incomparable to its current state. In fact, Garosu-gil was once a quiet residential area in Sinsa-dong, but from the early 2010s, it became filled with unique stores like designer brands, galleries, and cafes. It was a street dominated by hip sensibilities, much like Seongsu-dong is now. Later, fashion and beauty brands started to take over, and eventually, it became the Garosu-gil we commonly think of.

Led by Apple, large brands like Nike and Adidas established themselves, and Garosu-gil enjoyed its peak in the 2010s. But now, only the Apple Store remains, and the commercial district itself has visibly died.

[Anchor] If that's the case, why has Garosu-gil become what it is now?

[Reporter] It seems Garosu-gil has been directly hit by the economic downturn. Even if you want to do business in Garosu-gil, you need to sell products to make a living, but when products don't sell, naturally, you can't do business and have to vacate the store. There's also talk of an oversupply of commercial buildings. Building investment was once popular, and as many people rushed in thinking it would be profitable, it led to an oversupply. The problem is that while demand is low and supply is high, with stores in excess, landlords are not lowering rents. In the past, as popularity increased, the commercial district heated up and rents rose sharply. As a result, local brands and small shops have already left, and even successful brand stores are leaving because they can't cover the rent due to poor business, but landlords are not lowering the rent citing falling property prices. They're leaving it as a ghost street.

Also, because of high rents, Garosu-gil is gradually changing into a street dominated by large brands, losing its unique character. This leads to less interest from visitors, merchants leaving, and consequently, fewer people visiting, creating a vicious cycle. I met with merchants in the Sinsa-dong commercial district. Let's meet them together.

[Anchor] It seems that the economic downturn and rent increases have combined to create the current state of Garosu-gil. Are there any other factors?

[Reporter] The COVID-19 pandemic also appears to have affected the decline of the Garosu-gil commercial district. Garosu-gil has many large stores like megastores and flagships, but as the commercial area was hit hard by COVID-19, offline store visits decreased, and online shopping became mainstream. As a result, the need for flagship stores decreased, leading many stores to withdraw.

Also, as new bustling areas for young people emerged, such as Seongsu-dong, Ikseon-dong, and Yeonnam-dong, they began to replace Garosu-gil. These days, people often make plans to meet in Seongsu or Hongdae areas.

The significant decrease in Chinese tourists also seems to have had an impact. In the past, Sinsa-dong was famous as a street frequented by Chinese tourists, but now it's rare to see any Chinese tourists. Due to the THAAD retaliation and the "Hanhanryeong" (ban on Korean cultural content), as well as the US-China power struggle, relations with China have cooled, leading to reduced exchanges. While tourists from other countries like Japan have filled the gap, it's difficult to match the numbers from China.

(Yonhap Infomax Broadcasting News Department, Kyung Pyo Hong)

※This content is from the video news covered in the Yonhap News Economy TV's "Investigation File" corner.

kphong@yna.co.kr

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