E-commerce firms in Seoul to move to cheaper regions till H1 2025

They are going after lower rents to achieve financial stability.

In a recent report, Savills noted that e-commerce companies in Seoul are expected to continue relocating from the three major districts until 1H/2025. 

“The growth of the e-commerce sector has slowed due to increased offline purchases since the pandemic, worsened by issues like the TicketMonster-WeMakePrice incident and the entry of Chinese competitors,” the report said.

Here’s more from Savills:

To enhance financial stability, these companies are moving to regions with lower rents. For example, Interpark has relocated to Pangyo's 2nd Techno Valley, while 11th Street has moved to Gwangmyeong, and SSG.COM plans to shift to KB Yeongdeungpo Tower in Q1/2025. 

In CBD, Korea Seven's move to East Central Tower in Gangdong-gu will create a 10,000 sq m vacancy in Signature Tower, which Korean Reinsurance is expected to fill by Q2/2025. Additionally, WeWork Euljiro branch will close mid-September, increasing the CBD vacancy rate in Q4/2024. 

In GBD, Samsung Securities will relocate to A Pro Square in Q4/2024, with Craver Corporation expected to fill some of the resulting vacancies. However, GBD is not experiencing as many tenant relocations as the other districts, leading to limited changes in its vacancy rate.

In YBD, Kaver Korea will occupy FKI Tower in Q4/2024, while some small financial firms will vacate IFC 2 and IFC 3. LG CNS in Parc 1 Tower 1 is also set to reduce its space by 2 floors, totaling about 7,000 sq m. 

Overall, the proportion of space vacated by new organizations has decreased, indicating a slowdown in leasing demand, which is a trend that is expected to continue into the next quarter.