South Korea adjusts industrial land use amid knowledge industry center vacancies

South Korea is facing significant challenges with knowledge industry centers, which were originally designed to support manufacturing and R&D but have increasingly been used as speculative real estate investment products. Recent data from the Ministry of Trade, Industry and Energy shows that among centers completed between 2023 and 2025, the average vacancy rate reached 43.5% and the unsold rate hit 26.9%. This oversupply and market downturn have led to a record high of 3,876 auction cases last year.

In response to these issues, local authorities are adjusting land use plans. In the Gyeyang Industrial Complex in Incheon, officials have converted certain knowledge industry center plots into multi-industry zones to mitigate the risk of unsold units. This change allows for a broader range of sectors, including telecommunications equipment, electrical equipment, and automotive manufacturing. Additionally, regulations regarding solar power installation have been eased.

Experts suggest that to revitalize these centers, the focus must shift from merely providing physical space to supporting AI transformation (AX) and digital transformation (DX) for tenant companies. The government is also working on supply management systems to review vacancy rates and infrastructure conditions before approving new centers to prevent further oversupply.