Seoul’s general retail vacancy rate reached 9.4% in the second quarter, the highest in about five years, according to a Korea Real Estate Board survey released on the 4th. The deterioration is especially sharp in districts dependent on pedestrian traffic and nearby residents. Sinchon-Ewha’s vacancy rate rose to 12.1% from 7.1% in the second quarter of 2023, while Jamsil-Songpa reached 16.6% in both the first and second quarters of this year. Sinsa Station in Gangnam reached 18%, above its pandemic peak of 15.2%. By contrast, Myeongdong’s rate fell from 50.1% in the fourth quarter of 2021 to 6.3% in the second quarter, and Ttukseom (Seongsu) recorded 2.2% as foreign-tourist spending supported destination districts. Rising vacancies are reducing returns on small commercial buildings, once a popular retirement investment in Korea. Second-quarter rental income yields were 0.67% in Sinchon-Ewha and 0.44% in Jamsil-Songpa, equivalent to 2.7% and 1.8% on a simple annualized basis, below recent bank deposit rates of 3% to 4% a year. In Sinchon, owners under pressure to sell are sometimes cutting asking prices to lift yields toward around 4%, while advisers expect the divide between tourist-oriented and local-demand districts to persist.