South Korea's Yeouido financial hub sees office vacancies rise to record

Lee Sang-kun does not need to read the real estate section to know South Korea's financial hub is emptying.

Lee, 65, who operates a coffee shop in Seoul's main financial district, said his regular customers had been disappearing for most of the past year. First it was the new hires sent to fetch lattes for the office, then the more senior people vanished as local brokerages' headcounts fell to the lowest since 2007.

The office vacancy rate in Yeouido, home of the stock exchange and known locally as Korea's Wall Street, soared to 24.8 per cent in the second quarter, the highest in Savills data going back to 2002, as brokerages shed staff and shut branches on falling profits.

By comparison, office vacancies in Manhattan, home to the original Wall Street, hit a post-global financial crisis high of 11.6 per cent in the first quarter of 2010, according to Cushman & Wakefield.

"New-building construction is lifting Seoul's vacancy rate in general," said JoAnn Hong, a Seoul-based director at Savills. "But Yeouido seems to be getting hit harder because it's a financially focused area and was already feeling the pinch."

Earnings in the brokerage industry last year fell to the lowest since the first half of 2005, while trading on the Korea Exchange dropped to a six-year low, data compiled by Bloomberg and the Financial Supervisory Service showed.