Seoul’s New Office Leasing Volume Hits One-Year High... Vacancy Rate Rises to 4.2% [Real Estate AtoZ]

CBRE Korea
"Q2 Seoul Commercial Real Estate Market Report"

In the second quarter of this year, while new office buildings were consecutively added in downtown Seoul, resulting in a higher vacancy rate, active corporate relocations and expansions led to the largest new leasing volume in about a year. Although overall commercial real estate investment declined, hotel investments continued to rise for the fifth consecutive quarter.

According to CBRE Korea’s "2026 Q2 Seoul Commercial Real Estate Market Report," released on July 27, the volume of new leases for Grade A offices in Seoul’s downtown, Gangnam, and Yeouido districts reached 143,881 square meters—marking the highest level since the first quarter of last year. This trend was driven by moves such as Hyundai AutoEver and Gmarket relocating to Seongsu, as well as continued new tenants and office space expansions by companies in the IT and manufacturing sectors.

CBRE Korea "2026 Q2 Seoul Commercial Real Estate Market Report". CBRE Korea

The increase in new supply resulted in a higher vacancy rate. The average vacancy rate for Grade A offices across Seoul’s three major business districts rose to 4.2%, up 1.4 percentage points from the previous quarter. However, vacancies at existing offices—excluding the new supply in the downtown area—actually decreased.

By area, Gangnam had the lowest vacancy rate at 1.3%, supported by ongoing expansions from international IT and manufacturing companies. Due to newly supplied buildings, the downtown district vacancy rate climbed to 6.6%, while Yeouido recorded 3.1% as vacancies grew in some large buildings.

Rents continued to rise. The nominal rent per square meter reached 41,496 won per month, an increase of 1.4% compared to the previous quarter.

Commercial districts also maintained a recovery trend. Boosted by a rise in foreign tourists, rents in the Seongsu commercial district increased 14% from a year earlier, and its vacancy rate fell to 3.4%. Rents in Gangnam and Myeongdong also rose by 9% and 7%, respectively.

The logistics center market saw a reduction in vacancies as supply decreased. The vacancy rate for Grade A logistics centers in the Seoul metropolitan area declined by 2.6 percentage points from the end of last year, reaching 14.6%. In particular, as more cold storage was converted to ambient warehouses, the vacancy rate for cold warehouses dropped by 4.4 percentage points to 33.0%.

The commercial real estate investment market showed signs of a pause. Investment in the second quarter totaled 5.8232 trillion won, down 10% from the previous quarter and 21% from the same period last year. Office transactions led the market with 3.96 trillion won, accounting for 68% of the total. Hotel transactions amounted to 752.6 billion won, marking the fifth consecutive quarterly increase.

CBRE Korea forecast that, for the second half of the year, the leasing pace of new offices and the cost of financing associated with base interest rate hikes will be the key market drivers.

Choi Suhye, Executive Director and Head of Research at CBRE Korea, stated, “While real rents rose about 2% cumulatively for the first half of the year, the pace has slowed compared to the past. The speed at which new downtown offices are absorbed will be a key variable for future demand outlook.”

Choi further added, “Due to the high base effect from last year and increased borrowing rates, investment volumes have been adjusted. With July’s base interest rate hike increasing the burden of financing, selective investment based on the fundamental conditions of individual assets is likely to strengthen in the second half.”

This content was produced with the assistance of AI translation services.