South Korea commercial vacancy rate hits highest level since 2021

South Korea's national commercial vacancy rate reached 13.36% in the second quarter of 2024, marking the highest level since 2021. This represents seven consecutive quarters of rising vacancies. Data from the Korea Real Estate Board indicates that 16 out of 17 provinces and cities have seen higher vacancy rates compared to five years ago.

Sejong recorded the highest vacancy rate at 22.79%, with medium-to-large scale commercial properties in the city reaching 29.68%. Other regions with high vacancy rates include Daegu (17.84%), Chungbuk (17.43%), Gyeongbuk (16.66%), and Gwangju (16.50%). Even prime 1st-floor spaces have seen an increase in vacancies, rising to 6.68%.

Economic factors contributing to the trend include rising interest rates, high rents, and shifts in consumer environments. While some areas like Myeong-dong have benefited from increased foreign tourism, many local commercial districts continue to struggle. Representative Hwang Hee noted that the expansion of vacancies is a signal of the domestic economy and called for tailored policies to support small business owners.