Seoul's office market recorded a vacancy rate of 4.9% in the second quarter, up 1.7 percentage points from the previous quarter, while average rent reached a record ₩40,335 per square meter, according to global real estate services firm Colliers. The vacancy increase was driven by large-scale new supply totaling approximately 247,100 square meters across eight buildings in Seoul and Bundang, concentrated in the Central Business District (CBD). Despite rising vacancies, rental rates climbed 1.6 percent quarter-on-quarter as most newly supplied assets were prime-grade offices commanding above-market rents. CBD recorded its largest quarterly supply since Q4 2010, pushing the district's vacancy to 8.4 percent, while Gangnam Business District (GBD) maintained a low 1.5 percent vacancy amid robust tenant demand.
Seoul Office Rent Surpasses ₩40,000 Per Square Meter for First Time
Average nominal rent (excluding management fees) in Seoul's office market crossed ₩40,000 per square meter per month for the first time in the second quarter, reaching ₩40,335. The 1.6 percent quarterly increase came despite expanded vacancies, as newly completed prime office buildings set higher rental benchmarks than existing stock. CBD rent rose 2.0 percent to ₩42,063 per square meter, driven by premium pricing at recently delivered assets including G1 Seoul (approximately 143,000 square meters) and Rene Square (approximately 60,000 square meters). The divergence between rising vacancies and rising rents reflects the quality gap between new prime supply and older inventory.
CBD Vacancy Jumps to 8.4% on Record New Supply
The Central Business District recorded an 8.4 percent vacancy rate in the second quarter, up 3.9 percentage points from the prior quarter, as eight buildings totaling 247,100 square meters entered the market. This marked the largest quarterly supply in CBD since Q4 2010. Additional supply is scheduled for the remainder of the year, including the remodeled Eul Tower and Seyang Building. The concentration of new completions in CBD contrasts with limited activity in other districts, creating localized oversupply conditions in the urban core.
GBD and YBD Maintain Stable Occupancy Levels
Gangnam Business District (GBD) vacancy declined 0.2 percentage points to 1.5 percent in the second quarter, supported by active intra-district relocations including Simons, ABB Korea, and Bimer. Limited new Grade-A supply and confirmed future tenant moves by Bithumb and Craver Corporation are expected to sustain tight market conditions. Yeouido Business District (YBD) vacancy rose 0.2 percentage points to 2.7 percent following partial tenant departures from FKI Tower, including AMS Osram's move to Seocho-dong in GBD and Taesung Asset Management's relocation to Sinseol-dong, Dongdaemun-gu. However, financial sector demand remained robust, with intra-district moves by Lofty Rock Investment, Korea M&A Investment Association, and expansion leases by Woori Investment & Securities and BNK Busan Bank. Scheduled move-ins by Korea Trade Insurance Corporation, Prada, and JustCo are expected to keep YBD vacancy at current levels.
Second-Half Supply Concentrates in Seongsu and Gangnam
Approximately 106,500 square meters of new office space is scheduled for completion in Seongsu-dong in the second half of the year. GBD will see additional small-scale asset completions during the same period. Longer-term pipeline projects include Seoul Station North District, Hyundai Motor Global Business Center (GBC), and Seoripul Mixed-Use Development, which are expected to enter the market sequentially and shift district-level supply-demand dynamics.
Q2 Office Transactions Reach ₩4.2 Trillion
Total office transaction volume in Seoul and Bundang reached approximately ₩4.2 trillion in the second quarter. The largest deal was the Hana Securities Building in Yeouido, acquired by Hana Alternative Investment Asset Management and Shinsegae Central for ₩811.2 billion after Hana Securities exercised its preemptive purchase right. Other major transactions included G Tower in Guro-dong (₩697.7 billion), Euljiro 4-ga Eulji Twin Tower West Tower (₩657.0 billion), and Orange Center in Sunhwa-dong, Jung-gu (₩350.0 billion). A Colliers representative stated that district-level supply-demand changes will continue as large-scale development projects are delivered sequentially to the market.
FAQ
What was Seoul's office vacancy rate in the second quarter?
Seoul's office market recorded a 4.9 percent vacancy rate in the second quarter, an increase of 1.7 percentage points from the previous quarter, according to Colliers data.
Why did Seoul office rent reach a record high despite rising vacancies?
Average rent climbed to ₩40,335 per square meter because most newly supplied buildings were prime-grade offices with rental rates above the existing market average, pushing up the overall market benchmark despite increased vacant space.
Which Seoul office district had the highest vacancy rate in Q2?
The Central Business District (CBD) recorded the highest vacancy at 8.4 percent in the second quarter, driven by approximately 247,100 square meters of new supply including G1 Seoul and Rene Square.
