It’s Time to Turn Empty Downtown Shops into Test Stores

Public funding is sharing the cost of fixing buildings

As public funding shares the cost of securing, repairing, and renting empty shops, small operators can build services that find vacancies quickly, run trial tenancies, and support long-term occupancy without owning property themselves. The RE:CORE project for historic downtowns (원도심 RE:CORE 프로젝트), jointly led by the Ministry of Land, Infrastructure and Transport, the Ministry of Culture, Sports and Tourism, and the Ministry of SMEs and Startups, is designed not only to repair vacant buildings but also to help entrepreneurs and artists move in and work there.

The target areas are declining urban districts outside the Seoul metropolitan area, including established downtowns and secondary downtowns. A published draft guideline proposes securing at least 10 commercial units that have been vacant for more than one year along major streets, within a project area of no more than 150,000 square metres. This is still a draft plan, so the number of selected areas and detailed criteria may change in the final announcement.

Total project spending in one area can reach KRW 36.48 billion over four years, including up to KRW 24.24 billion in central government funding. That works out to about KRW 9.1 billion per area per year on average. The funding can therefore cover vacant shops, underused buildings, street environments, and cultural events together, rather than only wallpapering or replacing signs in a few units.

Local governments can buy shops or lease them for long periods, make cooperative agreements with building owners, and convert them into studios, startup spaces, shared offices, or short-term test stores. Tenant rent is also planned to be supported during the project period, though published materials do not specify the support rate or monthly cap. After the project, the policy calls for an operating plan of at least 10 years, including lease terms and a cap on rent increases.

A government press release puts the small commercial vacancy rate at 6.7% in the first half of 2022 and 8.5% in the first half of 2026, while a government infographic lists the 2022 figure as 6.6%. Put another way, the number of vacant units rose from roughly seven to roughly nine out of every 100 shops. The project aims to begin in 2027. Once spaces are secured, finding tenants and keeping the spaces operating will become an immediate need.

Operations become the bottleneck before space does

Imagine the head of a local cultural-event planning company with four employees. If the company is asked by a local government to survey 10 vacant shops, someone must walk the streets collecting addresses and photos, find building-owner contacts, and confirm vacancy periods, deposits, and repair scope by phone. The same information is copied repeatedly into maps, documents, and spreadsheets.

Even when a building owner agrees to a use, the operator cannot accept tenants immediately. They must check again whether electricity and water are working, whether toilets and fire-safety facilities can be used, whether food sales are possible, and who holds the keys. Conditions differ by unit, so when the person in charge changes, the team has to retrace previous phone conversations.

After recruitment begins, the work becomes more fragmented. A clothing seller wants two weekends, a craft maker needs a studio for a month, and a food seller needs water and cooking facilities. Some shops remain empty because dates and uses do not match, while applications overlap for one popular unit.

This was difficult before. A small operator could not take on deposits, rent, and repair costs in advance for every shop with unproven demand, negotiate separate contracts with multiple owners, and also bear the risk that tenants would not materialise.

When public funding covers a large share of the cost of securing shops and repairs, an operator can create a service without owning the buildings. The work is to collect each vacant shop’s condition and available dates in one place, receive applicants’ business types, desired periods, and required facilities, recommend suitable spaces, and manage contracts and key handover schedules.

Instead of opening 10 spreadsheets every morning, the same operator begins with shop statuses on a map. They divide spaces into categories such as “negotiating with owner,” “repair needed,” “available next month,” and “negotiating long-term tenancy.” When an application arrives, they contact only the units that can actually be used. After an event, they continue recording sales, visitor numbers, willingness to return, and whether a long-term lease was signed.

Much of the work still requires people. Checking a building’s safety conditions on site, negotiating lease terms with owners, and judging legal issues around business permits and contracts cannot be replaced by a screen. The service does not remove judgment. Its role is to reduce the time people spend repeatedly asking for and copying the same information.

Elsewhere, trial occupancy leads to long-term leases

Vacant to Vibrant in San Francisco is a programme that connects downtown vacancies with small businesses and artists through the city’s Office of Economic and Workforce Development and the nonprofit SF New Deal. Initial tenants pay no rent for three months and receive support for permits, insurance, shop fit-out, and operating costs.

According to SF New Deal’s own 2024 report, 10 of 17 participating shops moved into long-term leases, a conversion rate of 60%. The 2024 report says cumulative grants for pop-up shops totalled USD 147,000, about KRW 206 million. This treats becoming a formal tenant, not simply opening for a few days, as the outcome.

Seattle Restored began as a programme in which the City of Seattle and a local operating organisation offered vacant commercial spaces to local businesses and artists for three to six months. Alongside space, it supports insurance, marketing, business planning, and lease education, then connects promising businesses to long-term leases.

The operating organisation’s own figures list 27 long-term leases and about KRW 4.62 billion in revenue among participating businesses. It also secured 29 vacancies across 10 areas through partnerships with 15 property management companies. Shop registration, tenant recruitment, trial operation, and long-term contracting are connected as one flow.

In Freiburg, Germany, FWTM, the city’s tourism and economic development organisation, secures vacant spaces and offers them to local brands as test stores, usually for three to four weeks and for up to three months. Tenants can observe offline customer response at discounted rent, while building owners can assess potential long-term tenants through actual trading.

In a 2024 announcement, FWTM said it had run nine test stores over the previous four years, and five participating brands had opened permanent downtown shops. Rather than first building a large marketplace of spaces, it repeated short occupancies in a small number of units and built a record of conversions to permanent stores.

Four places to start

1. A vacancy acquisition dashboard

This is a service for managing a vacant shop’s location, vacancy period, building-owner consent, repair status, and available date in one place. It is for local-government staff and local operators that need to secure at least 10 vacant units.

It is needed now because projects are beginning that require proof of use rights for multiple shops. The first screen should show a map of the project area alongside the number of shops marked “secured,” “under discussion,” “contact needed,” and “repair needed.”

2. A short-term test-store matching service

This connects local brands that have sold only online with shops that are empty for a few days or weeks. Its users are food, clothing, and craft sellers testing their first offline sales, along with building owners waiting for long-term tenants.

When public funding covers space acquisition and repair costs, sellers who cannot take on long-term rent from the start can still run a test. The first screen should let them enter preferred dates, products for sale, required water and electricity facilities, and the cost they can afford.

3. A map for booking events and neighbourhood businesses together

This is a service that connects exhibitions, performances, and market events with reservations or benefits at nearby restaurants, studios, and accommodation. It is for organisers running events in historic downtowns and for street-level businesses that want customers on event days.

Even when cultural-event production costs are funded, nearby businesses see little lasting benefit if visitors see only the event and leave. The first screen should show each day’s event route, participating businesses, available booking times, and walking time between locations.

4. An operations desk for keys and repair requests

This is a service for managing move-in and move-out schedules, key handovers, electricity and water status, and cleaning and repair requests for each shop. It is for local companies managing multiple vacancies and for creators and sellers using spaces for short periods.

As trial occupancy becomes more frequent, on-site work at every turnover can become a larger burden than closing the contract itself. The first screen should show today’s move-ins and move-outs, unreturned keys, unresolved repair requests, and the next booking.

What to check today

Call one urban-regeneration department or historic-downtown support centre in a nearby local government outside the Seoul metropolitan area. Ask where it currently records building-owner consent, repair status, and available dates for 10 vacant shops. If the answer is that staff must reassemble separate documents and phone notes, or that it is difficult to see the current status when the person in charge changes, a small trial of a vacancy acquisition dashboard is worth considering first.

Why this matters where you are

Check whether your local government, property owners, or community organisations already fund or manage vacant commercial spaces but lack a shared operating system. The funding structure and rules may differ in your market, but the work of verifying spaces, matching short-term users, and tracking a path to longer leases remains concrete. Start by mapping where information is currently split across calls, documents, and spreadsheets.