Seoul to extend rent cuts of up to 30% for small businesses on city-owned properties

The Seoul Metropolitan Government will extend rent reductions for small business owners and small and medium-sized enterprises leasing city-owned properties through the end of this year. The measure had originally been set to expire at the end of last year.

According to the Seoul Metropolitan Government on Tuesday, small business owners and SMEs operating on city-owned properties whose sales fell compared with the previous year are eligible for rent reductions of 20 to 30 percent this year, along with deferred rent payments and late-fee reductions of up to 50 percent.

The city leases out 4,482 stores in ancillary facilities and commercial spaces within city-owned underground passages, parks and parking lots. Total support through this year's rent reductions is projected to reach 31.7 billion won ($22.2 million). Eligible tenants are those among the 4,482 stores whose sales declined compared with the previous year.

The reduction rate of 20 to 30 percent is applied based on the degree of sales decline, covering rent from January through December of this year, with support capped at 20 million won per store annually. Rates are tiered by sales decline: 20 percent for declines of up to 10 percent, 25 percent for declines of 10 to 20 percent, and 30 percent for declines exceeding 20 percent.

In addition, the city will extend rent payment deadlines by up to one year and reduce late fees by up to 50 percent. Each leasing department is expected to announce and begin accepting applications this month.

"We decided to extend the rent reductions to ease the burden on small business owners struggling under the double pressure of high prices and sluggish consumer spending," said Im Jae-geun, director general of the Seoul Metropolitan Government's Finance Bureau. "We hope these reductions will help tenants on city-owned properties recover financially and, in turn, inject new vitality into the local economy."