The Seoul office market bounced back for the first time in four years in 2024, with the transaction volume soaring 78.7% to 13.4 trillion won ($9.1 billion) from the year prior, according to GenstarMate, a South Korean real estate research and consulting firm.
Core offices in the Gangnam business district (GBD) and the central business district (CBD) accounted for 80% of the transactions, led by The Asset, which marked the country’s largest commercial building sale in 2024.
Koramco Asset Management Co. sold The Asset, Samsung Fire & Marine Insurance Co. headquarters in the GBD, to Samsung SRA Asset Management Co. for 1.1 trillion won.
The 2024 tally compared with 7.5 trillion won in 2023 and marked the first increase since the 13.99 trillion won in 2020 at the height of the COVID-19 pandemic.
It was also the second largest office sales volume in Seoul for a year since the research house started compiling the relevant data in 2000.
“Over the past two to three years, investors had targeted core assets in key business districts because of high borrowing rates and the difficulty in raising equity funds,” said an official of GenstarMate.
“Assets in other districts such as Sangam and Yeougdeungpo districts were relatively overlooked.”
The offices that changed hands in the GBD in 2024 included the Arc Place (791.7 billion won) and KOREIT Tower (480 billion won).
In the CBD, Donuimun D Tower (895.3 billion won), Hanwha Building (808.0 billion won) and City Square (428.1 billion won) found new owners.
The GBD and the CBD made up 5.8 trillion won and 4.9 trillion won of the 2024 office sales, respectively.
The GenstarMate official forecast the lack of new supply in major business areas to prop up the Seoul office market over the next couple of years.
The National Pension Service’s investment in South Korean real estate may add support. In 2025, the world’s No. 3 pension scheme plans to pour 2 trillion won into the domestic real estate market.
But slower-than-expected interest rate cuts could constrain fundraising, coupled with the political uncertainty in the aftermath of President Yoon Suk Yeol’s impeachment and in Donald Trump’s second term.
The political instability has already dealt a blow to the domestic office market. In December, Singapore’s GIC dropped the sale of Seoul Financial Center after its bidders lowered the valuation of the landmark building following Yoon’s ill-fated martial law attempt.
Pebblestone Asset Management recently withdrew the sale of Pacific Tower, a 23-story office building.
Meanwhile, Blackstone bought the Gangnam office of K-pop pioneer SM Group for 120 billion won in 2024 to renovate into a hotel, after selling the Arc Place at 791.7 billion won.
By Byung-Hwa Yoo
hwahwa@hankyung.com
Yeonhee Kim edited this article.
