Medical clinics drive Gangnam's retail economy, accounting for 62% of sales

Medical businesses — including dermatology and plastic surgery clinics — have emerged as the dominant force in Gangnam's commercial district. Despite accounting for just 27% of stores in the area, the medical sector generated 62% of total sales, driven by surging demand for medical tourism from foreign visitors. The "medical boom" is now expected to spread beyond Gangnam to other major commercial districts, including Seongsu, Dosan and Hannam.

Cushman & Wakefield Korea released a report Monday analyzing these trends, titled "Aldeon Dongne Dareun Dongne Season 4 #3: Medical & Gangnam Edition." The report combined social big data, card transaction data and real estate data to examine how medical demand is affecting retail consumption and building asset values in commercial districts.

Medical sector sales in Gangnam's commercial district rose 80% in 2025 compared with the previous year. As of the end of last year, medical stores accounted for just 27% of all businesses in the Gangnam district, yet they generated 62% of total sales.

In terms of sales volume, the Gangnam medical sector alone was about 1.5 times larger than the combined sales of five other major commercial districts — Myeong-dong, Hongdae, Seongsu, Dosan Park and Hannam-dong. Among the top 20 brands by sales in the Gangnam district, 95% were in the medical sector, far outpacing Hongdae at 52% and Myeong-dong at 30%.

Social big data analysis showed that online mentions of the Gangnam commercial district tend to translate into actual consumer spending and demand for space with a lag of roughly two quarters. The district's vacancy rate fell from about 23% in the fourth quarter of 2023 to about 13% in the second quarter of 2026.

Cushman & Wakefield Korea said medical tenants "simultaneously drive leasing activity, increase overall building sales, and raise the potential for asset value appreciation." As an example, a building on Gangnam-daero identified as Y Building saw its total sales rise 65% after a medical tenant moved in, while a nearby S Building recorded a 32% increase.

The trend runs parallel to the expansion of foreign tourism. The number of foreign patients visiting South Korea reached about 2.01 million in 2025, surpassing 2 million for the first time, while medical tourism spending reached approximately 1.7 trillion won ($1.27 billion) — roughly 12 times the level of five years earlier. Beauty-related specialties dominated foreign patient visits, with dermatology accounting for 63% and plastic surgery 11%, together making up 74% of all consultations.

By nationality, Japan and China each accounted for about 30% of foreign patients. Taiwan's share grew from 0.5% in 2019 to 9.2% in 2025, reflecting a broadening of the demand base centered on nearby countries.

Medical tourism demand is also reshaping the hotel sector, giving rise to a "medical stay" model that combines accommodation with clinical services. Oakwood Premier COEX Center in Gangnam has brought a clinic into approximately 1,650 square meters on its basement level, while UH Suites Seoul Insadong in Jongno-gu was designed from the planning stage as a mixed-use space integrating hotel and medical facilities.

The Grand Lotte Seoul in Jung-gu has converted some rooms on its eighth and ninth floors into medical and wellness spaces. Cushman & Wakefield Korea said medical tenants diversify a hotel's revenue structure by generating stable rental income from otherwise underused space while also driving food and beverage, retail and beauty spending linked to guest stays — with the potential to lift overall asset values as well.

The medical sector's growth is expected to spread beyond Gangnam. Last year, medical sales rose 110% in Myeong-dong and 295% in Hongdae, with the number of medical stores growing 25% and 14%, respectively. Gangnam, Hongdae and Myeong-dong are already proven markets underpinned by tourism demand, while Seongsu, Dosan and Hannam are absorbing the medical sector as high-end markets driven by premium consumer demand.

Yoon Hwa-seop, managing director of the retail leasing group at Cushman & Wakefield Korea, said medical businesses have become "a core sector that lifts not just clinical space but the overall consumption of a commercial district and the value of entire buildings." He added that building owners and hotel operators "should view medical tenants not as a matter of leasable area, but as a factor that transforms the revenue structure of the entire asset."

Yoon said the next phase of medical sector growth "starts not from where it enters, but from what kind of demand it meets," adding that "a leasing strategy suited to the character of each commercial district will determine asset values going forward."

Cushman & Wakefield is a global commercial real estate services firm with about 53,000 professionals across more than 350 offices in 60 countries.