Monday, February 13, 2012

Guro-gu boom, a bang for the (renmin)buck

I recently mentioned Seoul's most expensive neighborhoods for opening shop (see "Six lanes of traffic"), but a recent article in Chosun Ilbo delivered a full picture at the district level for premium spaces, exposing a spectacular boom for Guro-gu and Geumcheon-gu (respectively +39.9% and +36.1% between 2011 and 2010 in the value per square pyeong)*. All districts posted gains (up to 12-15% for Gangbuk-gu, Jung-gu, Gangseo-gu, and Gwanak-gu), except Gangnam-gu (-1.8%), Dobong-gu (-2.2%), and Yongsan-gu (-11.2%).

As a result, the central and traditional office space strongholds Jung-gu and Jongno-gu moved to the top of the rankings, and Guro-gu jumped from the lower tier to third place. Gangnam-gu, the 2010 leader, was downgraded to 4th, and Seocho-gu (an anemic +0.2%) from 3rd to a distant 5th, threatened by Mapo-gu (+4.2%), and even Yeongdeungpo-gu (+8.1%).

The relative pause for the southern stars (Gangnam-Seocho) doesn't come as a surprise, following the bubble years. Yongsan's bad year is probably a side-effect of massive redevelopments: they're making room for the IDB and various new towns, particularly around Seoul Station (I'm really afraid the atmosphere around Malli-dong market** will not be the same after the evacuation).

Southwest Seoul is catching up nicely: Gangseo-gu certainly benefits from the new Line 9, and Geumcheon-gu from the Gasan Digital Complex, but as they develop their own infrastructures, Gyeonggi-do neighbors (e.g. Gimpo or Gwangmyeong) also contribute. On the other hand, they bring fresh competition: see how the new Lotte Mall Gimpo Airport is taking aim at such hotspots as Yeongdeungpo's Seoul Times Square.

So last year, it was Guro's time to shine. A nice reward for a district that discovers glamour after the transformation of Guro Industrial Complex into Guro Digital Complex (from factories to venture / IT startups), or the inauguration of D-Cube City***. Note that Garibong-dong, Seoul's center for Chinese communities, is naturally attracting Chinese money. Of course, along came the Chinese triads, and the fight for premium commercial space is raging at that level too, more than often involving North Korean / ethnic Chinese gangs. But that's an epiphenomenon, and don't picture yourself in the South Central L.A. of yore: you're in Seoul, and in Guro-gu, a vibrant district for families. Just enjoy the city!

Overall, another year of inflation: prime commercial estate surpasses KRW 100 M per pyeong* in 16 of the 25 districts, compared to 9 in 2010. But as expected, the gap between the 'richest' and the 'poorest' is decreasing: from 63% in 2010 (Gangnam-gu 126.6 M, Gangbuk-gu 77.590 M) to 58% in 2011 (Jung-gu 134.92 M, Dobong-gu 85.44 M).


Seoul Village 2012
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*see "구로구 점포 권리금, 강남구 앞질렀다는데" (20120208 Chosun Ilbo). NB: 1 pyeong = 3.3 square meter.
** see "
Sungwoo Barbershop, Malli-dong Market"
*** about the latter, see "
D-Cube City and Korean Food Street (Byeokgyesu)"

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