[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 E

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 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 of these spaces will be filled.

This is not limited to YIBD. Simultaneous development is underway in the Sewoon District, Seosomun, and the northern Seoul Station area. The redevelopment of the Yongsan Electronics Market area is also gaining momentum. Commercial real estate research firm RSQUARE estimates that from 2027 to 2031, a total of 7.6 million square meters (2.3 million pyeong) of office space will be supplied in Seoul. This is comparable to the 7.97 million square meters (2.41 million pyeong) supplied between 2009 and 2014, when office space rapidly increased due to developments like Pangyo Techno Valley.

Global real estate services company CBRE Korea also projects 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) inside the old city walls, the Gangnam Business District (GBD), and the 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 fact remains that the volume of supply is expanding. The concentration is also severe: 3.89 million square meters, or 83% of new supply, will be focused on the CBD. Once this supply is completed, the size of the CBD office market will be twice that of the Gangnam Business District and three times that of the Yeouido Business District.

The Sewoon District, stretching from Jongmyo to Euljiro to Toegye-ro, covers an area of 439,000 square meters, similar to YIBD. The Sewoon District is being developed at a high density, with a floor area ratio of 1,000-1,500%. If the plans are realized as intended, a forest 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 development, a large-scale business district will also be created in this area.

To this, the YIBD and Yongsan Electronics Market area developments are being added. YIBD covers 456,000 square meters, with a maximum floor area ratio of 1,700% and an average of 900-1,000%. In the Yongsan Electronics Market area, where development is progressing faster than in the international business district, more than 10 buildings of around 30 stories will be built across 11 project zones. Most of these are office facilities.

Currently, the office vacancy rate in Seoul is lower than the natural vacancy rate of 5%, indicating a stable market. Compared to major global cities like New York, London, and Beijing, where vacancy rates hover around double digits, Seoul’s market is healthy. But can we be confident about the situation five or ten years from now? In a scenario of supply glut, the more important variable is the change in demand. The automation of work and workforce reductions using artificial intelligence (AI) are only just beginning. Hybrid work-flexible arrangements combining working from home and in the office-is becoming increasingly common. The required office space is bound to decrease.

The Seoul office market, centered on the downtown area and Yongsan, will face a structural inflection point and a period of major transition over the next decade. 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 must be taken to address the risks of oversupply.

Urban development is a process that must be designed with a horizon of at least 10 to 20 years in mind. It requires the foresight to anticipate 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 for the future.