Seoul office market transactions rebound in Q2

The Seoul office market experienced a rebound in transaction volume during the second quarter, driven largely by large-scale corporate deals. Total transaction amounts for office buildings reached approximately 1.77 trillion won, a 79.3% increase from the previous quarter, while office space transactions surged to 2.59 trillion won, a 417.6% increase from the previous quarter.

Despite the increase in transactions, the average vacancy rate rose to 6.5%, up 0.4 percentage points from the previous quarter. This rise was primarily driven by the Central Business District (CBD), where new supply concentrated caused the vacancy rate to reach 7.3%. Conversely, the Gangnam Business District (GBD) maintained very low vacancy rates for large-scale offices at 0.3% to 2.2% due to a lack of new supply.

A ‘flight to quality’ trend is evident as demand concentrates on premium assets with strong locations and cash flows. In the Yeouido Business District (YBD), the IFC office building recorded a massive transaction of approximately 1.93 trillion won, and the Hana Securities building was sold for 811.2 billion won, setting a record price per pyeong for the district. Corporate transactions accounted for over 90% of the market activity in both office buildings and individual office spaces.