CBRE Korea Announces Domestic Retail leasing sentiment Ranks First in Asia-Pacific Region

- Domestic retail leasing sentiment stands at 58.7%, marking the highest in the Asia-Pacific region.
- Emerging commercial districts such as Hannam, Seongsu, and Dosan-daero expected to drive retail market recovery this year

May 28, 2024(Seoul) – According to the "Korea Retail Leasing Sentiment H1 2024" report released by the world’s largest commercial real estate services company CBRE Korea, domestic retail leasing sentiment has reached 58.7%, the highest in the Asia-Pacific region. This figure is approximately 1.6 times higher than the Asia-Pacific average leasing sentiment of 36%, and above other countries in the region such as Japan at 56.9% and Singapore at 45.7%.

Although there was a slight decrease from 64.3% in December 2023 to 58.7% in March 2024, domestic retail leasing sentiment still shows the most robust demand within the Asia-Pacific region. With a 2.3% increase in domestic retail sales compared to the same period last year and the Consumer Confidence Index maintaining above 100 in 2024, the domestic retail leasing sentiment is expected to remain high this year.



In the Asia-Pacific region, Japan's retail leasing sentiment significantly increased from 21.4% in December last year to 56.9% in early this year, thanks to record-high tourist arrivals. Singapore at 45.7% and India at 38.7% also maintained solid retail leasing sentiment. However, retail leasing sentiment in Hong Kong saw a significant drop from 40.5% last year to 14.3% this year, continuing a wait-and-see approach amid macroeconomic and interest rate uncertainties.

The report is the result of a survey conducted in March 2024 among 124 CBRE retail leasing experts across the Asia-Pacific region to gauge market trends and forecasts. It includes key inquiries about leases, retailer relocation preferences, forecasts for major domestic commercial districts, and cross-border expansion demand by sector.

Emerging commercial districts represented by Hannam, Seongsu, and Dosan-daero are expected to lead the recovery of the retail market this year. With the influx of trendy fashion and F&B stores favoured by MZ Generation, vacancy rates are low at 0% in Hannam, 3.3% in Dosan-daero, and 2.8% in Seongsu, indicating strong retail leasing demand in these districts. As of the fourth quarter of 2023, the average rent in emerging commercial districts was KRW 46,200 per square metre in Dosan-daero, KRW 46,700 per square metre in Seongsu, and KRW 56,800 per square metre in Hannam, supporting the demand for emerging commercial districts. On the other hand, traditional commercial districts, including Myeong-dong and Gangnam, are also on a recovery trend, but the vacancy rates remain higher compared to pre-COVID-19 levels. Especially Myeongdong, which was most affected by the decrease in foreign visitors due to the pandemic, recorded a vacancy rate of 27.7% in the fourth quarter of 2023, the highest among major commercial districts.

Ryan Kim, Head of Retail, Advisory & Transaction Services, of CBRE Korea, stated, "The high domestic retail leasing sentiment is a testament to the steady recovery of consumption following the pandemic. Moreover, changes in commercial districts reflecting new trends, along with strategies to strengthen locations within key areas, are increasing the preference for prime retail assets." He added, "Especially, diverse expansion activities in fashion, beauty, and F&B, along with the domestic entry of global brands and the overseas expansion of domestic brands, are expected to highlight the cross-border expansion."