Guess which area in Seoul saw the largest retail rent increase

Rents in this area grew by 1.0% in Q3.

Both Shopping Mall and High Street rents in Seoul increased equally by 0.4% q-o-q, noted JLL in a recent report.

“Gangnam saw the largest rent increase of 1.0% q-o-q, backed by strong foot traffic and reduced vacancy. Garosu-gil dropped 0.5% q-o-q due to large packs of long-standing vacancies,” the report said.

Here’s more from JLL:

No major Shopping Mall deals closed in the quarter. The majority of the transactions were High Street deals between individuals and SMEs. Both SM and HS yields remained flat q-o-q at 6.6% and 6.3%, respectively, as a lack of transactions prevented cap rate adjustments.

Backed by improved occupancy rates in One Grove, SM vacancy rate was 1.3%, down 91 bps q-o-q. HS vacancy rate also decreased by 329 bps, recording 15.2%. Gangnam exhibited the largest quarterly vacancy drop, while Hongdae saw a marginal uptick. Others remained flat.

Outlook: Some investors seek conversion-to-other-use opportunities, but regulatory challenges take their toll

Chinese travellers’ temporary waiver of visa requirements is expected to maintain tourism momentum. Commercial districts targeting foreign visitors, like Myeongdong, are shifting from F&B-centric offerings to cosmetic-focused businesses, driven by K-beauty influence.

As retail sectors weaken and offline branches close, sellers are disposing of their retail assets through conversion to other types, such as residential. However, securing local government approvals for use changes poses challenges, constraining deal closures.