Vacancy Reduction Drives Rent Increase... Seoul Office Average Rises 7%

Seoul office rents are rapidly rising amid a low vacancy rate in the 2% range. It is analyzed that the market has shifted to a landlord-favorable one as corporate office demand increases and vacancies are resolved.

Seoul city office building skyline / Photo by Yonhap News

According to the 'Office Monthly Market Trend' recently announced by Genstarmate on the 21st, last month Seoul office monthly rent recorded 87,087 KRW per 3.3㎡, up 7.1% compared to the same period last year. The high rent increase trend has continued, with a 6.7% rise in April as well.

In particular, rent in the Gangnam Business District (GBD) rose 10.2% year-on-year to 93,576 KRW per 3.3㎡, the highest increase among the three Seoul districts. However, the vacancy rate (1.3%, excluding new buildings) was the lowest. Although a large-scale vacancy occurred when JW Pharmaceutical in the JW Tower, a mid-to-large office, moved to its new headquarters in Gwacheon, all leases on the relevant floors were reportedly signed shortly thereafter. Yuhan-Kimberly also completed moving into the Dongwon F&B Building.

The rapid rent increase amid low vacancy rates was also seen in the Yeouido Business District (YBD). Last month, YBD monthly rent rose 8.3% year-on-year, the highest increase since June 2022. The amount was 85,823 KRW per 3.3㎡. At the same time, the vacancy rate excluding new buildings in YBD was 1.6%, lower than the Seoul average of 2.2%. This was largely influenced by RaonSecure expanding its headquarters from the Wooshin Building in GBD to the NH Financial Tower, one of the largest offices in YBD. In the future, Yeouido Anchor One (Brighton Yeouido), with a total floor area of about 17,000 pyeong, will be supplied, and Yuanta Securities plans to use about 10 floors.

In the Central Business District (CBD), the monthly rent increase rate was only 4.5% during the same period, but the absolute value was the highest among the three districts at 102,467 KRW per 3.3㎡. The vacancy rate, excluding new buildings, was relatively high at 2.7%. However, by size, the vacancy rate for mid-to-large offices decreased by 1.7 percentage points from the previous month, showing the largest drop. This is mainly attributed to the resolution of about 7,000 pyeong of vacancies due to the move-in of Hyundai affiliates and Seoul National University Hospital (administrative departments) in the Hyundai Group Building. Genstarmate stated, "Currently, many redevelopment projects are underway in the CBD, most of which are expected to be completed after next year, so vacancy rates are expected to remain relatively stable this year."