Office transactions in the Seoul Metropolitan Area reached 5.9 trillion won ($4.1 billion) in the third quarter, surpassing 5 trillion won for the second straight quarter, according to Savills on Monday.
The pace of deals is expected to push this year’s total to an all-time high, with several transactions expected to close by year’s end, real estate analysts say.
Demand for trophy assets led transaction growth as large business groups sought new headquarters amid renewed inflows of foreign capital.
Limited new supply in the area through 2028 is expected to keep rents firm, offsetting the impact of space reductions and relocations by some major companies.
High-value deals include the 1.98-trillion-won transaction of Tech 1 in Pangyo, a major tech cluster south of Seoul.
Korea Investment Real Asset Management Co. teamed up with KakaoBank to acquire the landmark office tower. The mobile banking platform joined the consortium to secure office space for its headquarters, using surplus cash reserves.
In Seoul’s central business district (CBD), Dongkuk Steel Mill Co. bought back Ferrum Tower, a decade after selling it.
The Korea Scientists and Engineers Mutual-Aid Association (SEMA) formed a consortium with Pacific Asset Management Co to acquire NC Tower 1 in the GBD for use as its office.
Foreign capital, which had been mostly absent earlier in the year, returned to the South Korean office market in the third quarter.
The UK-based Aberdeen Investments and US-based BentallGreenOak each completed share-deal purchases of Pacific Tower in the CBD and Tower 730 in Jamsil, eastern Seoul.
Hong Kong-based PAG partnered with Koramco Asset Management Co. to buy Digital Dream Tower in Seoul’s Digital Media City.
LOW VACANCIES, STEADY RENTS
Vacancies stayed low in southern Seoul. The vacancy rate in the GBD stood at 1.7%, remaining below 3% since 2022.
By contrast, the CBD vacancy rate edged up 0.9 percentage points to 5% from the previous quarter, after SK Group consolidated offices and reduced leased space.
In the Seoul Metropolitan Area, rents climbed 4.6% in the third quarter, more than double September’s 2.1% consumer inflation rate.
Analysts forecast a slight uptick in vacancy rates as SK Group and LG Chem Ltd. plan to downsize or relocate to secondary offices in 2026, though vacancies are expected to remain below historical averages.
