[Seoul, Now]Who Will Fill the Growing Number of Offices in Seoul?

Concerns Over Office Oversupply Overshadowed by Housing Supply Debate
Office Supply Surge in Downtown Districts and Yongsan, Including Sewoon
Does Building More High-Rises Really Boost Seoul's Competitiveness?
The Need to Consider Changing Work Environments Driven by AI

The Seoul Metropolitan Government and the central government are at odds over the scale of housing supply in the Yongsan International Business District (YIBD). While they are engaged in a tug-of-war over whether to supply 6,000, 8,000, or more than 10,000 units, another key issue is being overlooked. As plans for high-rise office buildings in downtown Seoul continue to emerge, no one is asking how all this space will be filled.

Yongsan International Business District is not the only area in question. Simultaneous large-scale developments are underway in the Sewoon District, Seosomun, and the northern Seoul Station area. The redevelopment of the Yongsan Electronics Market area is also gaining momentum.

According to commercial real estate research firm RSquare, the supply of office space in Seoul from 2027 to 2031 is estimated at 7.6 million square meters (2.3 million pyeong). This is nearly equivalent to the 7.97 million square meters (2.41 million pyeong) supplied between 2009 and 2014, when office construction surged due to developments like Pangyo Techno Valley.

Global real estate services company CBRE Korea also expects that by 2031, 4.71 million square meters of new office space will be supplied in Seoul's three major business districts: the Central Business District (CBD), Gangnam Business District (GBD), and Yeouido Business District (YBD). This represents an increase of more than 45% compared to the current 10.57 million square meters.

Although the timing of supply may be delayed, the expansion in supply itself remains unchanged. The concentration is also notable: 3.89 million square meters, or 83% of new supply, will be focused in the CBD. Once this supply is completed, the CBD office market will be twice the size of the Gangnam Business District and three times that of the Yeouido Business District.

The Sewoon District, which stretches from Jongmyo to Euljiro to Toegye-ro, covers an area of 439,000 square meters, comparable to the Yongsan International Business District. The Sewoon District is being developed at a high density with a floor area ratio of 1,000-1,500%. If the plan is realized as intended, clusters of 30- to 40-story office buildings will emerge. Including the Seosomun building redevelopment, the former JoongAng Ilbo headquarters, Hoam Art Hall, and the nearby northern Seoul Station area, a massive new business district will be created here as well.

In addition, the Yongsan International Business District and the Yongsan Electronics Market area will join in. The Yongsan International Business District will apply a maximum floor area ratio of 1,700% and an average of 900-1,000% to its 456,000-square-meter site. In the Yongsan Electronics Market area, where redevelopment is progressing faster than in the International Business District, more than 10 buildings of around 30 stories each will be constructed across 11 project zones. Most of these will be office facilities.

Currently, the office vacancy rate in Seoul is below the natural vacancy rate of 5%, indicating a stable market. This is healthier than major global cities such as New York, London, and Beijing, where vacancy rates hover around double digits. However, can we be confident about the situation five or ten years from now? In a scenario of supply glut, the more important variable is changes in demand. The automation of work and workforce reduction through artificial intelligence (AI) is only just beginning. Hybrid work-flexible arrangements combining remote work and office attendance-is on the rise. The demand for office space will inevitably decrease.

Over the next decade, the Seoul office market, particularly in the downtown and Yongsan areas, will face a structural inflection point and a period of major transformation. Is the Seoul Metropolitan Government fully aware of the risks of office oversupply? In the post-pandemic era, with the work environment being reshaped by AI and office demand changing, proactive measures are needed to address the risk of oversupply.

Urban development is a process that must be designed with a vision for at least 10 to 20 years into the future. It requires insight into changes in industrial structure, work styles, and life cycles. Simply building more high-rise buildings will not make Seoul a global business hub. Now is the time for leadership that can truly design the future.