An aerial view of the Seongsu Strategic Redevelopment Zone District 3 in Seongdong-gu, Seoul. The photo is not directly related to the article. [Provided by Samsung C&T]
An aerial view of the Seongsu Strategic Redevelopment Zone District 3 in Seongdong-gu, Seoul. The photo is not directly related to the article. [Provided by Samsung C&T]

Samsung C&T's construction division is planning a retail-specialized complex at the Seongsu Strategic Redevelopment Zone District 3 — known as Seongsu District 3 — where it is competing to secure construction rights. The company aims to attract well-known brands to apartment retail spaces that might otherwise sit vacant, boosting the overall viability of the redevelopment project.

According to industry sources Thursday, Samsung C&T has established a dedicated in-house team focused on retail space to pursue a specialized retail strategy across reconstruction and redevelopment complexes it has won or plans to win. The team is working with global real estate consultancies to determine the tenant mix and develop a full merchandising plan — covering product planning, production, sales and distribution — tailored to each site's location and consumer demand. The strategy goes beyond simple retail layout, aiming to sharpen the competitiveness of each complex through a curated tenant mix.

Seongsu District 3 is a redevelopment project covering approximately 114,193 square meters around 572-7 Seongsu-dong 2-ga in Seongdong-gu. Construction costs alone are estimated at around 1.8 trillion won ($1.19 billion), and the complex is expected to house more than 2,200 units. Its Han River frontage and proximity to the Seoul Forest commercial district — which has drawn heavy investment from high-net-worth individuals — make it one of the most commercially promising sites in the city.

This is not the first time Samsung C&T has pursued a retail-specialized approach. The company is already considering similar strategies for reconstruction and redevelopment projects it has secured in Heukseok-dong, Dongjak-gu, and Yeouido-dong, Yeongdeungpo-gu. At Seongsu District 3, where tourism demand — particularly from foreign visitors — is especially high, the specialized retail plan is expected to bring in recognized brands across a range of categories, including medical services, hagwon and cultural venues.

Vacant retail units inside an apartment complex. [Herald DB]
Vacant retail units inside an apartment complex. [Herald DB]

Samsung C&T's push to build out a retail merchandising strategy reflects a growing problem in redevelopment projects: vacant commercial units. Soaring construction costs have driven up pre-sale prices not just for apartments but for retail units as well, yet tenants have been unable to keep pace with the resulting rent levels, causing vacancies to multiply. Pre-sale prices at recently completed reconstruction complexes have reportedly reached 200 million to 400 million won per 3.3 square meters.

The trend is visible in the data. Seoul's collective retail rental price index climbed from 99.65 in the first quarter of 2024 to 100.53 in the first quarter of 2025, and rose further to 101.40 in the first quarter of this year. As rents have risen on the back of higher pre-sale prices, the vacancy rate for Seoul collective retail space has also moved up, from 8.3 percent in the third quarter of 2024 to 9.1 percent in the first quarter of this year.

Olympic Park Foreon, a complex of more than 12,000 units, illustrates the problem: despite its scale, the development struggled to secure tenants from the outset, leaving a significant number of units empty. Helio City in Garak-dong, Songpa-gu, saw its retail vacancy rate approach 10 percent shortly after residents moved in, and Raemian One Bailey in Banpo-dong — a complex of around 3,000 units — also took an extended period to attract retail tenants.

"In the past, commercial facilities were primarily a vehicle for recovering initial investment costs," an official at a real estate consulting group said. "More recently, whether a complex offers a specialized retail offering has become a factor that determines both the returns for union members and a construction company's competitiveness in bidding."

Another construction industry official said that more occupied retail units directly reduce the financial burden on union members, adding that major construction companies are increasingly exploring merchandising partnerships with overseas operators.


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