[2020 National Audit] One in Ten Large and Medium-Sized Commercial Buildings in Gangnam Is Vacant

[Asia Economy Reporter Lee Ji-eun] Due to the collapse of self-employed businesses and the impact of the novel coronavirus disease (COVID-19), vacancy rates of medium-to-large and small-scale commercial properties in major commercial districts of the Seoul metropolitan area have surged sharply over the past three years. In Gangnam, the vacancy rate of medium-to-large commercial properties nearly reached 10% in the second quarter.

According to data submitted on the 16th by the Ministry of Land, Infrastructure and Transport and the Korea Real Estate Board to Song Seok-jun, a member of the National Assembly Land, Infrastructure and Transport Committee from the People Power Party, the average vacancy rate of medium-to-large and small-scale commercial properties nationwide rose significantly in the second quarter of 2020.

Before the Moon Jae-in administration took office, the vacancy rate of medium-to-large commercial properties in the first quarter of 2017 was 9.5%, which increased by 26.4% to 12.0% over three years, while the vacancy rate of small-scale commercial properties also rose from 3.9% to 6.0% during the same period.

Medium-to-large commercial properties suffered significant damage in the Seoul metropolitan area. The vacancy rate of medium-to-large commercial properties in Seoul rose from 6.5% to 7.9% during this period, especially in downtown areas, which increased from 5.0% to 8.2%, and in Gangnam, which rose from 5.3% to 9.8%.

[Image source=Yonhap News]

The vacancy rate of medium-to-large commercial properties in Gyeonggi Province also increased from 6.6% to 9.8% during this period.

The vacancy rate of small-scale commercial properties also rose sharply nationwide. In Seoul, it increased from 2.9% to 4.2%, and in the Yeongdeungpo and Sinchon areas of Seoul, the vacancy rate more than doubled from 2.3% to 4.7%.

There were also places where the 0% vacancy rate record was broken within three years. In the Chungmuro commercial district of Seoul, the 0% vacancy rate for medium-to-large commercial properties was broken, and there are 12 places where the 0% vacancy rate record for small-scale commercial properties was broken, including Mokdong and Itaewon in Seoul, and Goyang City Hall and Pyeongtaek Station in Gyeonggi Province.

Representative Song said, "Since the Moon Jae-in administration took office, the forced minimum wage increase and the 52-hour workweek have rapidly worsened the real economy, and with the prolonged impact of COVID-19, self-employed business owners are being driven to the brink. Therefore, a comprehensive review of government policy direction and prompt support measures for the victims must be prepared."

This content was produced with the assistance of AI translation services.