The government is re-examining the supply plan for commercial properties in the third-phase new towns. This is because, amid prolonged domestic stagnation, the market is increasingly forming around online commerce since COVID-19, leading to a growing number of vacant stores nationwide.
If the current standards for commercial land in public housing districts are maintained, it seems that the supply of commercial properties in the third-phase new towns will also be unable to avoid oversupply. This could result in a repeat of the large-scale vacancy crisis that occurred in the second-phase new towns. Accordingly, the government plans to examine whether the standards for commercial land are appropriate before adjusting the supply of properties in the third-phase new towns.
According to the Ministry of Land, Infrastructure and Transport on the 25th, the department's Public Housing Promotion Team has recently launched a study on improving the supply and management of commercial lands in new towns. This study aims to assess the appropriateness of the scale of commercial properties scheduled for supply in third-phase new towns such as Namyangju Wangsil, Hanam Gyosan, Incheon Gyeyang, Goyang Changneung, and Bucheon Daejang.
While the supply of commercial properties in new towns is decreasing, vacant stores continue to increase. According to the Korea Real Estate Board's '2024 Q4 Commercial Real Estate Leasing Trend Survey,' the vacancy rate for shopping centers last year was 10.1%, up 0.2 percentage points from a year earlier. The vacancy rate for commercial properties recorded 9.92% in 2023 after hitting 9.35% in 2022, marking double digits for the first time last year.
Although the issue of vacant commercial properties is worsening nationwide, the current supply standards for commercial properties in the third-phase new towns are based on the 2019 standards for commercial land in public housing districts. However, due to the COVID-19 pandemic over the past six years, consumer trends have shifted from offline to online, leading to a rapid increase in vacant stores, making it inevitable to revise the supply plans for commercial properties.
Currently, the proportion of commercial land in the third-phase new towns is 0.8%, which is lower compared to 4.5% in the first-phase and 1.91% in the second-phase new towns. In terms of 'per capita' commercial facility area, the third-phase new towns have 8.6 square meters per person, which is lower than the first-phase new towns (11.4 square meters per person) but higher than the second-phase new towns (7.9 square meters per person).
In the previously developed second-phase new towns, a large-scale vacancy crisis occurred. In second-phase new towns such as Namyangju Byeollae, Gimpo Hangang, and Pajuwondong, the vacancy rate for commercial properties once approached 30%. This was attributed to increasing the proportion of commercial land without considering the utilization rate of these properties during the planning stage of public housing districts.
Through this study, the Ministry of Land, Infrastructure and Transport will assess whether the planning of commercial land in public housing districts is appropriate and adjust the supply of commercial properties in the third-phase new towns. A ministry official noted, "The supply standards for commercial properties in the third-phase new towns were established before COVID-19, and we want to see if these standards are still valid, given the changes in consumer trends since then. We will reflect on the findings of the study in the plans for the supply of commercial properties in the third-phase new towns."
Based on the results of this study, the Ministry of Land, Infrastructure and Transport will consider adjusting the standard for the commercial facility area per person to apply 6 to 8 square meters if the current land development scale is less than 3 million square meters. Additionally, it plans to establish a guideline for estimating demand for commercial facilities that reflects regional characteristics and draft a revision of public housing operation management guidelines. To prevent oversupply of commercial properties, measures to downscale the non-residential proportion of mixed-use developments will also be considered.
A ministry official said, "The results of this research project are expected to be released within the year."