Commercial Vacancies: It Might Research Deeper Than Just the Economy

Hello, I am Woo-tae Hong from 'Mini Storage DaLock', a self-storage service.

These days, when walking past commercial streets, "For Lease" banners catch my eye quite often. When vacancies persist, it is easy for building owners to blame the economy. But let's think about this for a second. South Korea's GDP growth rate in the first quarter of 2025 was 1.7%. That is a phenomenal figure. Yet, commercial vacancies in our neighborhoods remain unchanged.

This growth came from semiconductors, shipbuilding, and defense. It did not come from our real estate. That is why we must think structurally.

Things That Weren't in Our Homes 10 Years Ago

Stylers, air purifiers, and massage chairs. They didn't exist in our homes 10 years ago, but now many people own them. Incomes have increased by more than 30% compared to 10 years ago, and consumption patterns and lifestyles have changed accordingly.

The problem is that houses cannot accommodate all of those desires. A house is a physical space, and it cannot be changed at will. You would need to move to a larger house, but housing prices are too expensive.

But there is an interesting paradox here.

While it is hard to find a home you want to live in, vacancies in commercial buildings are overflowing.

Connecting What is Left Over with What is Scarce Becomes a Business

The average price per pyeong of an apartment in Seoul is over 40 million KRW. Inside that expensive space, balconies, utility rooms, alpha rooms, and built-in wardrobes are fully packed. The value of the items stored inside them might be less than 1 million KRW. People are cluttering up spaces worth 40 million KRW per pyeong with items worth 1 million KRW.

On the other hand, commercial properties nearby rent out space for 30,000 KRW per pyeong.

As home rent rises to 100,000 or 200,000 KRW per pyeong, commercial storage space looks relatively more appealing. Naturally, people start to think, "I could store things I don't use at home right here."

This is the structural reason why self-storage is growing.

The Era of Simple Leasing is Over

The population is declining, and consumption behavior has changed since the pandemic. Demand for offline retail is structurally shrinking. If it is a prime real estate on a main street, it will lease well, but otherwise, solving vacancy issues through simple leasing is difficult.

The answer is operation. It is about infusing content into your building.

An actual case makes it even clearer. A 50-pyeong commercial space in Yeongdeungpo, Seoul, used to receive 3.05 million KRW per month in rental income. After converting this space into Mini Storage DaLock, it now generates an additional 6.20 million KRW per month. That is more than double the previous rental income. This structure remains highly profitable even after subtracting facilities investment costs.

The Government is Also Moving in the Same Direction

The Ministry of Economy and Finance designated self-storage as a new industry. The Ministry of Land, Infrastructure and Transport legally established a dedicated use classification named 'Shared Storage Facility'. In its 2024 real estate investment guidelines, the National Pension Service named self-storage as a 'New Economy' asset and included it in its portfolio.

This means institutional organizations have already recognized this direction.

In the Era of Operations, the Operator is What Matters

Once you find the content that suits your building, the next step is finding the company that can operate that content best. It is difficult to run it yourself. It must be a company that has been proven over time, manages the largest footprint, and is chosen by consumers.

Mini Storage DaLock has reviewed 1,200 real estate properties, currently operates 228 branch locations, and has over 120,000 members. It was selected as a High-Growth Company by the Financial Times, received a commendation from the Ministry of Land, Infrastructure and Transport, holds 7 automated operation technology patents, and is also scheduled to open within GS E&C's Xi apartments.

How Will You Operate Your Asset?

It is easy to blame the economy when vacancies arise. However, the structure has changed. We are in an era where solving vacancies is hard through simply waiting for tenants.

Whether you own empty commercial space or underutilized real estate, or want to participate in self-storage operating profits with a small investment, feel free to inquire via the consultation application below. We will provide a detailed response.

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