Average monthly rent for shops amounts to $861 in Korea

Average monthly rent for shops amounts to $861 in Korea. December. 05, 2015 09:52. january@donga.com.

The monthly average rent of self-employed people’s small businesses, for which the contract date of store space rent is registered with state realty rental registry, amount to about 1 million won (861 U.S. dollars), a new report suggests.

According to a report on rent situation of small-sized store spaces, 142,238 stores that are classified into businesses closely linked with people’s living spent an average monthly rent of 1 million won (861 dollars). The report was released Friday by the National Tax Service that surveyed 230,045 businesses whose contract date of their rent was registered from 2012 to 2014.

Under the current law on protection of store rent contract, if the self-employed with small businesses register the contract date of their store rent to the local tax office, their lump sum key deposit can be guaranteed for preferential reimbursement before other creditors in case of auction or public sale. Eligible small businesses are those who have lump sum key deposit valued at 400 million won (345,000 dollars) or less in Seoul, 300 million won (258,000 dollars) or less in Incheon and Gyeonggi Province, and 240 million won (207,000 dollars) or less in metropolitan cities.

According to an analysis by the National Tax Service, the monthly rent for drug stores was the highest at 1,415,000 won (1,220 dollars) among of businesses that have applied to register the contact date of their store rent. It was followed by that of convenience stores (1,264,000 won or 1,010 dollars), and bakery shops (1,241,000 won or 1,069 dollars). Business with the lowest monthly rent was florist shops at 786,000 won (677 dollars), while other stores with relatively low monthly rent were laundry shops (820,000 won or 706 dollars), and interior shops (833,000 won or 717 dollars).

Businesses closed linked with people’s living were most commonly situated on the first floor, accounting for 65.5 percent, while those on the second floor or higher took up 28.3 percent, and those in the underground floor came to 5.6 percent. Businesses whose most preferred location is the first floor was convenient stores, as 93.5 percent of them were sitting on the first floor. Many of the operators of cram schools (86.0 percent), billiards shops (81.6 percent), and PC cafes (73.0 percent) had their shops on the second floor or higher.

The area where store rent is the highest in Seoul was Gangnam-gu where the average monthly rent per store was 1,827,000 won (1,574 dollars). The average monthly rent was also high in its neighboring district of Seocho-gu at 1,683,000 won (1,450 dollars). Store rent per square meter was higher in old city centers of northern Seoul such as Jung-gu (32,252 won or 28 dollars) and Jongno-gu (28,589 won or 24.6 dollars).

Given most store spaces for businesses in highly commercial districts in Jongno and Gangnam Station in Seoul, not subject to registration of contract date due to their hefty rent, actual monthly rent in these areas would be much higher than that, according to the National Tax Service and the real estate sector.