Consumer sentiment shows significant improvement

• The CSI remained strong throughout the quarter, recording 110.8 in July, 111.4 in August and 110.1 in September, backed by strong export performance. Notably, the livelihood recovery support payments distributed from July temporarily enhanced the domestic consumption.
• The number of foreign tourists hit 1,820,332 in August, up 16.4% y-o-y, with Chinese tourist volume increasing 19.6% y-o-y. With the visa-free entry policy for Chinese group tourists starting from late September, Chinese tourist numbers are expected to grow further.

One Grove’s vacancy rate quickly stabilises after three quarters, falling into single digits

• No new Shopping Mall or High Street stock was added to the JLL basket in Q3 2025.
• Backed by improved occupancy rates in One Grove, SM vacancy rate was 1.3%, down 91 bps q-o-q. HS vacancy rate also decreased by 329 bps, recording 15.2%. Gangnam exhibited the largest quarterly vacancy drop, while Hongdae saw a marginal uptick. Others remained flat.

Retail investment sentiment hardly shows signs of recovery

• Both Shopping Mall and High Street rents increased equally by 0.4% q-o-q. Gangnam saw the largest rent increase of 1.0% q-o-q, backed by strong foot traffic and reduced vacancy. Garosu-gil dropped 0.5% q-o-q due to large packs of long-standing vacancies.
• No major Shopping Mall deals closed in the quarter. The majority of the transactions were High Street deals between individuals and SMEs. Both SM and HS yields remained flat q-o-q at 6.6% and 6.3%, respectively, as a lack of transactions prevented cap rate adjustments.

Outlook: Some investors seek conversion-to-other-use opportunities, but regulatory challenges take their toll

• Chinese travellers’ temporary waiver of visa requirements is expected to maintain tourism momentum. Commercial districts targeting foreign visitors, like Myeongdong, are shifting from F&B-centric offerings to cosmetic-focused businesses, driven by K-beauty influence.
• As retail sectors weaken and offline branches close, sellers are disposing of their retail assets through conversion to other types, such as residential. However, securing local government approvals for use changes poses challenges, constraining deal closures.