Amid Endemic Optimism... Seoul Small-scale Commercial Vacancy Rate Falls in Q1 After Six Months

Survey Results: 9 out of 10 Office Workers Return to ‘Full On-site Work’

Vacancy Rates of Small-scale Commercial Spaces in Gwanghwamun and Myeongdong Drop by 9.0%P and 8.2%P Respectively

Seoul’s Business Districts and University Commercial Areas Show Rapid Recovery

[Asia Economy Reporter Kim Min-young] With growing expectations of the endemic phase, major business districts and university commercial areas in Seoul are showing signs of recovery, such as a decrease in vacancy rates of small-scale commercial spaces under two floors. This is attributed to the government lifting the outdoor mask mandate from the 2nd of this month and the gradual return of office workers and university classes to offline settings, which has boosted consumer sentiment and dining-out demand.

On the 4th, commercial real estate data specialist RSquare analyzed data from the Korea Real Estate Board and found that the vacancy rate for small-scale commercial spaces (two floors or less, total floor area under 330㎡) in downtown, Gangnam, and Yeouido areas of Seoul was 6.2% in the first quarter of this year. This marks a decline in vacancy rates after six months since the third quarter of last year.

In particular, vacancy rates in business districts crowded with office workers have significantly decreased. The vacancy rate for small-scale commercial spaces in Gwanghwamun was 12.7%, down 9.0 percentage points from the fourth quarter of last year. Jongno recorded 7.1%, a decrease of 2.7 percentage points. Myeongdong, which had a vacancy rate exceeding 50%, dropped to 42.1%, down 8.2 percentage points from the previous quarter.

The atmosphere in the Gangnam area is similar. The vacancy rate at Sinsa Station fell to 0%, down 4.4 percentage points from the previous quarter. Teheran-ro dropped 0.3% to 1%, and Nam-Bu Terminal and Nonhyeon Station were found to have no vacant commercial spaces.

The recovery trend is also prominent in university commercial areas popular with the MZ generation. Areas such as Hongdae-Hapjeong (16.7%), Sinchon-Ewha (13.8%), Seoul National University Station (6.1%), and Hyehwa-dong (0.6%) all saw decreases in vacancy rates compared to the previous quarter.

RSquare conducted a survey titled ‘Changes in Our Lives in the Endemic Era’ from April 15 to May 1, targeting 456 office workers. The results showed that 94.7% of respondents answered that ‘full remote work ended in the past month.’ During the same period, 43.4% said they had ‘offline company dinners,’ and 63.8% responded that they ‘have planned company dinners.’

Respondents identified business districts expected to benefit from the endemic (multiple answers allowed) as Gangnam Station (65.8%), Hongdae-Sangsu-Hapjeong area (53.9%), and City Hall-Gwanghwamun (47.4%). These are areas where office worker gatherings and university student meetings are expected to be active.

The business districts benefiting from the endemic were ranked as Gangnam (67.1%), downtown areas including Gwanghwamun, City Hall, and Jonggak (47.4%), Yeouido (43.4%), Bundang-Pangyo (36.2%), and Seongsu (25.0%). It is expected that areas where business districts and commercial zones are well balanced will see significant revitalization effects.

Yoon Yeo-shin, Vice President of the Real Estate Business Division, said, “With the lifting of social distancing, suppressed dining-out demand is increasing. Business districts such as Gangnam, Seongsu, Euljiro, and Yeouido, as well as university areas where major commercial zones are concentrated, are rapidly recovering to their pre-COVID-19 pandemic state.”

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