Gyeonggi-do, the Only Region Nationwide with Decreased Commercial Vacancy Rates Despite COVID-19 Spread

Average Vacancy Rate of Medium to Large Commercial Spaces in Gyeonggi-do at 9% in Q3
National Average Hits Record High of 12.4%
"High Commuter Traffic Due to Concentration of Large Residential Facilities"

[Asia Economy Reporter Onyu Lim] Amid the nationwide commercial market freezing due to the impact of the novel coronavirus infection (COVID-19), Gyeonggi-do was the only region in the country where the vacancy rate decreased.

According to an analysis of statistics from the Korea Real Estate Board by the Commercial Information Research Institute on the 17th, the average vacancy rate of medium to large commercial properties in Gyeonggi-do in the third quarter of this year was recorded at 9%, down 0.8 percentage points (p) from the previous quarter. Considering that the nationwide vacancy rate of medium to large commercial properties reached a record high of 12.4% in the third quarter due to the impact of COVID-19, this is a remarkable result. The vacancy rate in Gyeonggi-do is 3.4%p lower than the national average and was the only region to reduce its figure compared to the previous quarter.

Among the 27 major commercial districts in Gyeonggi-do, 11 areas saw a decrease in vacancy rates in the third quarter compared to the previous quarter, 6 areas recorded the same rate as in the second quarter, and 10 areas experienced an increase in vacancy rates.

The area with the largest decrease in vacancy rate was Bundang. The vacancy rate of medium to large commercial properties in Bundang in the third quarter was 1.9%, down 4.5%p from 6.4% in the second quarter. This was followed by Osan City Hall (3.6%p decrease), Pyeongtaek Station (3.4%p decrease), Moran (3.3%p decrease), and Dongducheon Jungang-ro (2.7%p decrease).

The investment yield of medium to large commercial properties in Gyeonggi-do also increased in the third quarter compared to the previous quarter. The average investment yield in the third quarter was 1.37%, up 0.6%p from 1.31% in the second quarter. Among major cities nationwide in the third quarter, only Gyeonggi-do and Busan saw an increase in investment yield compared to the second quarter.

Researcher Hyuntaek Jo of the Commercial Information Research Institute explained, "Due to the spread of COVID-19, the nationwide commercial market has been facing difficulties with increasing vacancy rates and declining sales," adding, "In this atmosphere, commercial districts with steady demand, such as office and residential areas, are relatively doing well."

He continued, "In the case of Gyeonggi-do, many large residential facilities are concentrated, and a significant floating population moves along commuting routes, so it maintains a relatively better atmosphere than other commercial districts," and analyzed, "Also, compared to Seoul, rents are relatively cheaper, so the burden of rent is relatively low, which seems to help maintain the commercial districts."

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