Nationwide Commercial Vacancy Rate Hits Record High... "Non-Face-to-Face Transactions Boosted by COVID-19"

Sangga Information Research Institute: "12 out of 100 Medium to Large Commercial Buildings Nationwide Are Vacant"

[Asia Economy Reporter Onyu Lim] As non-face-to-face transactions have increased due to the prolonged COVID-19 pandemic, the vacancy rate of medium-to-large commercial buildings nationwide has reached an all-time high.

On the 13th, the Commercial Information Research Institute analyzed statistics from the Korea Real Estate Board and found that the vacancy rate of medium-to-large commercial buildings nationwide in the fourth quarter of last year averaged 12.7%. This is a 1 percentage point (p) increase compared to the 11.7% vacancy rate in the same period the previous year, marking the highest since the statistics were first surveyed in 2002.

Among metropolitan cities including the Seoul metropolitan area, Daegu recorded the highest vacancy rate for medium-to-large commercial buildings at 16.8%. This was followed by Ulsan (15.6%), Gwangju (15%), Incheon and Daejeon (13.8%), Busan (13.5%), Gyeonggi (9.6%), and Seoul (8.8%).

Among major cities nationwide, Gwangju saw the largest increase in vacancy rate for medium-to-large commercial buildings compared to the same period last year, rising by 2.5%p. This was followed by Incheon and Busan (1.5%p ↑), Daegu (1.4%p ↑), Daejeon (1%p ↑), Seoul (0.8%p ↑), and Gyeonggi (0.5%p ↑). Ulsan was the only region where the vacancy rate decreased.

In provincial cities, Gyeongbuk recorded the highest vacancy rate for medium-to-large commercial buildings at 19%. This was followed by Chungbuk and Jeonbuk (17%), Gyeongnam (14.7%), Gangwon and Chungnam (14.2%), Jeonnam (11.3%), and Jeju (6.7%).

Researcher Hyuntaek Cho of the Commercial Information Research Institute stated, "With the increase in non-face-to-face transactions, the recent rise in the use of online shopping, social commerce, and delivery applications has dealt a significant blow to offline store sales. Due to this impact, the number of store closures by tenants unable to afford rent has increased, leading to a nationwide rise in commercial building vacancies compared to 2019," he analyzed.