Aegis Asset Management and Daishin Securities: "Seoul Office Prices in Q1... Up 5.7% YoY"

[Asia Economy Reporter Park Jihwan] The Seoul office sales price level in the first quarter of this year increased by 5.7% compared to the same period last year.

According to the 2020 Q1 "Aegis-Daishin Seoul Office Sales Index" report released on the 28th by Aegis Asset Management and Daishin Securities, the Seoul office sales price index in Q1 this year was 355.4 points, up 1.3% from the previous quarter (350.9 points). Compared to the same period last year (336.1 points), it increased by 5.7%.

The report stated, "Although there are concerns about COVID-19, a decrease in office lease demand has not yet appeared," and attributed this to "still higher yields than traditional assets like bonds and lower volatility than stocks." It also judged that expectations of price increases due to the lowest interest rates after COVID-19 partially influenced this.

However, the transaction volume of Seoul offices in Q1 this year was about 1.8 trillion KRW, which is 64% of the same period last year (2.9 trillion KRW). It explained that the transaction volume was somewhat affected by COVID-19.

Representatives from Aegis Asset Management and Daishin Securities said, "Although the office transaction volume decreased in Q1 this year, the rise in sales prices means that competition for preferred assets among investors has intensified," and added, "In the second half of the year, when a decrease in lease demand due to economic slowdown is expected, an annual price increase rate of around 2% rather than a high price surge is anticipated."