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Aftermath of Covid-19…vacancy rate of small-sized commercial buildings in Myeong-dong hits record high Updated: 2021-08-06 10:09:41 KST

The COVID-19 outbreak has taken its toll on Korea's tourism and shopping industries, and one of the worst hit areas is the central shopping district of Myeong-dong.

"I find Myeong-dong much quieter. The number of people on the streets has definitely decreased a lot."

"I come here once in a week or maybe like twice in a month. It depends on whatever I want. I think now it's less crowded compared to before corona."

The lack of visitors means many shops are now empty.

"Myeong-dong is one of the largest commercial districts in Seoul and a shopping mecca for foreign tourists.
But amid the pandemic, more than four out of 10 small-sized commercial buildings have become vacant"

According to the Korea Real Estate Board, the vacancy rate of small-sized commercial buildings in Myeong-dong hit over 43 percent in the second quarter this year.
And the higher vacancy rate has led to cheaper leases.
The lease cost index of small buildings in Myeong-dong has fallen from 117 in the fourth quarter of 2019 to below 90 by the second quarter of this year.
Building owners usually do not lower the lease fee even if it's vacant… due to the concerns about a drop in the value of the building.
But the long period of vacancies has started to force owners to reduce their rent.
On the surface, it appears that Myeong-dong is losing its competitiveness. However, experts say that the high vacancy rate could be an opportunity for the shopping mecca to reinvent itself for local shoppers.

"About 80% of visitors in Myeong-dong were overseas tourists. Since cosmetic products were the number one choice among foreign visitors, most of commercial buildings here were occupied by cosmetic shops, which limited the choice for customers.
However, as many of buildings became empty and their rents fell, small merchants who wished to do business in Myeong-dong, but couldn't due to high rent have now moved in."

The expert added that the higher vacancy rates also provide chance for building owners to repair and renovate the mostly 50-year-old buildings.
Seo Eunkyung, Arirang News.
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