In further evidence of deteriorated economic conditions from protracted slowdown, commercial buildings across Korea are losing tenants and delivering fewer returns for property investors amid increasing business shutdowns.

According to the Korea Appraisal Board on Wednesday, the vacancy rate for mid- to large-sized commercial properties reached 10.4 percent in the first three months, up 0.7 percentage point from the fourth quarter ended December last year. The vacancy rate for smaller buildings also rose 0.3 percentage point to 4.7 percent over the same period, affected by weakening consumer confidence and troubled industrial cities from shutdown of automaking and shipbuilding facilities.

The vacancy rate of mid- to large-sized commercial spaces in Seoul was up 0.7 percentage point to 7.7 percent and that of small building rose 0.4 percentage point to 3.7 percent. The vacancy rate for large buildings in Ulsan, the southern coastal city hit by the protracted slowdown in its main shipbuilding industry gained 1.7 percentage points to 13 percent.

The average investment return dropped to 1.72 percent for mid-to-large properties and 1.58 percent for small ones, down 0.12 percentage point each.

The vacancy rate of non-commercial offices reached 12.7 percent, up 0.8 percentage point from a quarter earlier and 1.2 percentage point from a year ago, due to the increased supply amid weakening business performance.

By Chun Beom-joo and Mira Choi

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]