Domestic and foreign consumers present contrasting trends

• The CSI showed mixed results during the quarter, recording 109.8 in October, 112.4 in November and 109.9 in December. This indicates that concerns over further won depreciation and inflation pressures have led to reduced domestic consumption.
• Overseas tourist arrivals continued rising, even surpassing pre-pandemic levels. November totalled 1,596,939, up 17.3% y-o-y, with Chinese tourists the largest share at 26.9% y-o-y. Tourist spending also increased with rising visitor volumes.

Vacancy rates slightly improve across both Shopping Malls and High Streets

• No fresh Shopping Mall or High Street stock was added to the JLL basket in Q4 2025.
• Occupancy rates improved in COEX Mall, One Grove and Parnas Mall, with SM vacancy rate dropping marginally at 20bps q-o-q to 1.1%. HS vacancy also saw a modest improvement of 68bps q-o-q, noting 14.5%, with Myeongdong and Cheongdam’s vacancy rate dropping substantially.

Modest rent growth continues amid fragmented transaction market

• Shopping Mall and High Street rents both rose 0.4% q-o-q, respectively. Garosu-gil alone saw rents fall 0.5% due to ongoing stagnation, while Myeongdong recorded the largest quarterly growth at 1.0%, driven by increasing tourist volumes.
• Both SM and HS yields remained flat at 6.6% and 6.3% q-o-q, respectively. With retail transactions still dominated by high street deals between individuals and SMEs, significant yield adjustments remain unlikely.

Outlook: Growing tourism revitalises certain high streets

• The boost in tourism has injected vitality into select high streets. Retailers are responding to increased tourist volumes by introducing multiple cosmetics stores, pharmacies and vape shops targeting foreign visitors.
• While many department stores and shopping malls are in the pipeline for sale, most are not concluding deals due to subdued investment appetite. Retail transactions are expected to occur selectively, concentrated mainly on high street assets in prime locations.