Seoul mall vacancy rates fall to a record 0.9% in Q4

This is the lowest level since 2019.

According to a JLL report, mall vacancy rates in Seoul fell to 0.9%, the lowest since Q4 2019. Except for Times Square, which did not see any changes, other malls saw decreased vacancies.

Hongdae HS boasted the largest decrease in vacancy rates, from 19.7% to 9.9% q-o-q, driven by the opening of 8Seconds.

Here’s more from JLL:

Shopping Mall and High Street rents increased by 0.2% and 0.6%, respectively. Among High Streets, Hongdae saw the largest rent increase of 1.5%. Conversely, Garosugil’s rent fell by 0.5% q-o-q due to large pockets of unresolved vacant spaces.

HS cap rate remained at 6.2%, while that of malls rose by 10 bps to 6.5%. The most notable transaction was The Exchange Seoul Mall, which GIC sold along with its office building to the Koramco Asset Management-CTCORE consortium for circa KRW 50 billion.

Outlook: Continued sluggish domestic spending to impede High Streets’ vacancy rate recovery

While retail investment remains bearish, only a handful of HS deals at reasonable prices are expected to occur. Despite improved liquidity following rate cuts, deal volumes are likely to remain insufficient for meaningful cap rate adjustments in the near-term.

Some districts, like Garosu-gil, may continue to face vacancy issues due to prolonged weakness in domestic spending and severely reduced footfall. However, rents in prime districts will remain more resilient as occupancy continuously improves.