Value context and insight. lkm@koreatimes.co.kr
Pandemic to push up commercial building vacancy, housing demand
Signs put up on the window of a building read “entire floor for rent” in Jongno-gu, central Seoul. Korea Times file
By Lee Kyung-min
By Lee Kyung-min
Commercial building vacancy and housing demand will soar due to the rise of online transactions and working from home, brought on by the COVID-19 pandemic, an industry expert said Friday.
A preference for contact-free transactions, he added, will drive demand for infrastructure needed for underground transport, among many other city planning initiatives that will bolster disease control and prevention.
Home designs will be strengthened with increased functions of leisure, entertainment and creative activities amid reduced outdoor activities, a major change from a place only for rest and sleep, he noted.
Hongik University Architectural Design professor Yoo Hyun-joon said a fundamentally different approach is needed on how best to utilize spaces amid increased housing demand and growing commercial vacancies.
“Broad city planning is needed to reflect changes in people's behavior and preferences following the pandemic,” he said.
The call is in line with a steady increase in vacancy rates for commercial office buildings. Data from Korea Appraisal Board showed the rate for the buildings nationwide increased to 11.7 percent in the first three months of 2020, up 0.7 percentage points from 11 percent from a quarter earlier.
The rate for Seoul, the most popular metropolitan area in the country with the lowest vacancy rate, stood at 7.0 percent in the first quarter of 2020, up 1 percentage point from three months earlier.
Itaewon, a popular commercial district in Seoul, saw the highest jump, with the rate soaring 9 percentage points to 28.9 percent from 19.9 percent.
Apgujeong in southern Seoul, Yeongdeungpo in southwestern Seoul and Myeongdong in downtown Seoul saw the rate jump 7.5 percentage points, 4 percentage points and 3.1 percentage points, respectively.
However, heavily populated residential areas including Sanggye-dong in northern Seoul, and Teheran-ro in southern Seoul, saw the rates drop by 2.4 percentage points and 2.3 percentage points, respectively.
Logistics and transport service providers should consider building their facilities underground which in turn will allow more spaces to be used freely for uses not previously thought of, he added.
“Spaces are defined by how people use them. They can be whatever people want them to be ― a playground, resting place or working area. People's needs change, and so should and will the function of spaces in a way that can reduce socioeconomic status-oriented social conflict and strengthen social cohesion, a crucial step amid online communications exchanged only within among a group of people with same age, shared interests or similar social and political views,” he said.
Meanwhile, contact-free logistics businesses are on the rise, illustrated by the over 10 percent year-on-year increase in sales reported by Market Kurly since the outbreak of COVID-19. The Seoul-based firm is an online grocery shopping and delivery service provider.
According to the firm, its orders jumped 25 percent in February from a month earlier, and the firm customer base has expanded, especially those aged over 60. The number of new customers jumped 122 percent in 2020 from a year earlier and orders placed 153 percent.