Marsten Investment Management Shares Outlook for Second Half Commercial Real Estate Market: “Alpha, Not Beta, Will Decide the Game”

Marsten Investment Management held a session to analyze the domestic commercial real estate market for the second half of this year under the theme "From Beta to Alpha."

On August 28, Marsten Investment Management announced on the 31st that it held an internal briefing for employees titled "Commercial Real Estate Market Outlook for the Second Half of 2026" in the main conference room on the 21st floor of its headquarters in Seocho-gu, Seoul.

Famous Mastern Investment Management Strategy Research Director is presenting at an internal briefing titled 'Commercial Real Estate Market Outlook for the Second Half of 2026.' Mastern Investment Management Brand Strategy Team

At this event, the Strategy Research Division of Marsten Investment Management's marketing department shared a recently published report of the same title. The report covered outlooks for the second half of the year and investment implications across key commercial real estate sectors such as office, logistics centers, data centers, and hotels.

The Strategy Research Division forecast that the size of domestic commercial real estate transactions this year would decline slightly year-on-year, ranging from a minimum of 26.7 trillion won to a maximum of 33.3 trillion won. The company explained that as market uncertainties increase, the gap between scenario forecasts is also widening. In the first half of this year, offices accounted for 72.8% of the total transaction value of 14 trillion won, but excluding a few large-scale office transactions, foreign investors preferred logistics centers (46.2%) and hotels (43.4%) over offices (10.4%), indicating a divergence in investment preferences by sector.

The presentation was delivered by Yoo Myunghan, the Head (Managing Director) of the Strategy Research Division in the marketing department at Marsten Investment Management. Dr. Yoo, who holds a Ph.D. in Urban Engineering, previously worked in the Real Estate Research Team at Woori Bank, the asset management team at IGIS Asset Management, and served as head of the research center at Avison Young Korea.

Dr. Yoo described the office market as entering a phase where vacancy rates are improving amid adjusted transaction volumes. He stated, "This year, office transaction volumes will range between a minimum of 19.4 trillion won and a maximum of 22.2 trillion won, which marks a moderate decrease from last year's 26.6 trillion won." He further noted, "The office vacancy rate in Seoul recorded 6.9% in the second quarter of this year, and we expect it to continue a downward stabilization trend through 2028." However, he added, "After 2028, further polarization in vacancy rates may occur, and the CBD area could face a long-term burden of higher vacancies."

The hotel market is also showing clear growth. The number of inbound foreign tourists in the first half of the year reached 10.71 million, up 21.3% from the same period last year, and with new supply decreasing, key hotels are maintaining an occupancy rate (OCC) of around 80%. In addition, transactions are becoming more active, especially among four-star hotels in the CBD and OBD areas, with Seoul's hotel transaction volume for the first half of this year reaching 1.32 trillion won, a 67% increase from the same period a year ago.

The logistics center sector is experiencing supply contraction as the volume of new projects starting in the Seoul metropolitan area has declined sharply due to the project financing (PF) market crunch and rising construction costs. Dr. Yoo forecasted, "Over the next three years after 2026, average annual new supply will decrease by 52% compared to the past 10-year average."

However, domestic institutional investors are expressing increasing interest in trophy assets, which has helped stabilize the transaction market in the first half of this year. Transaction volume for logistics centers in the Seoul metropolitan area in the first half declined by just 1.46% year-on-year, to 1.82 trillion won. Driven by trophy asset transactions among domestic institutional investors, annual logistics center transaction volume is expected to reach between a minimum of 4.3 trillion won and a maximum of 5.9 trillion won by year-end.

With regard to the data center sector, Dr. Yoo noted, "Power demand for data centers is expected to increase from 4,461 MW in 2025 to 6,175 MW in 2028, about a 1.4-fold rise, but vacancy rates may decrease due to growing AI demand." He added, "In Seoul and neighboring areas, where securing power supply is difficult, developments are focusing on urban data centers, while in regions like Sejong, Pohang, Gumi, Ulsan, and Busan, which have large-scale power infrastructure, hyper-scale data center development is expanding. Thus, the supply pattern is differentiated by region."

Dr. Yoo remarked, "The widening gap between the top and bottom range of transaction forecasts reflects mounting market uncertainty." He emphasized, "The ability to read fundamental differences by sector with precision will be a critical factor determining investment performance."

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