Large Office Deals Defy High Rates... Q3 Commercial Real Estate Transactions Hit KRW 5.3 Trillion [Real Estate A to Z]

KRW 1.7 Trillion Pours into Doosan Tower and Pine Avenue
Investment Strategies Diversify with Hotel Conversions, Headquarters Acquisitions, and Sale-and-Leasebacks
Foreign Investors Selectively Buy as Capital Flows to Prime Assets

As the commercial real estate market downturn continued amid persistently high interest rates, large office assets drove a rebound in overall transaction volume. Rising financing costs sharpened investors' selectivity, channeling capital toward high-quality assets with secure locations and tenant demand.

According to the "Q3 2026 Seoul Investment Market Report" released on October 30 by global commercial real estate services firm Cushman & Wakefield Korea, a total of 27 commercial real estate transactions were recorded in the third quarter, with a combined value of approximately KRW 5.3 trillion. The number of transactions fell by two from the previous quarter, while their total value rose by approximately 20%. The cumulative transaction value from January through September was approximately KRW 14.6 trillion, down 21% from the same period last year.

The report said, "With financing conditions burdensome, as the Bank of Korea raised its benchmark interest rate for a second consecutive month and government bond yields remained high, large transactions led market activity and pushed up the total transaction value."

Doosan Tower in Dongdaemun-gu, Seoul, acquired by IGIS Asset Management. The company plans to convert part of the building into a hotel and operate it. Reporter Kang Jinhyung.

In the office market, transactions were mainly driven by demand from buyers looking to increase asset value by remodeling aging buildings into hotels, and by companies directly purchasing their own headquarters. IGIS Asset Management acquired Doosan Tower in Dongdaemun, Jung-gu, Seoul, for KRW 897.143 billion and plans to operate part of the building as a hotel. Koramco Asset Management will convert K Square Hongdae, which it acquired for KRW 150 billion, into a hotel in partnership with Paradise Group.

Transactions also continued in which companies secured headquarters buildings or sold buildings and then leased them back. Hanwha Galleria purchased Seonhwa Building for KRW 213.5 billion to use as the headquarters of its new holding company. MDM Asset Management acquired Building A of Pine Avenue in Euljiro for KRW 800 billion. The seller, Shinhan Card, will reinvest in the property and remain as a long-term tenant. Asung HMP, the parent company of Asung Daiso, acquired Shinhan X-Space in Myeongdong for KRW 128 billion, and the seller, Shinhan Bank, will lease back part of the building.

Foreign investors focused on acquiring high-quality assets. Petra Bil Asset Management partnered with Hong Kong-based Gaw Capital to purchase City Center Tower in Euljiro for KRW 293.004 billion.

Quarterly commercial real estate transaction value. Dark blue represents offices, light blue logistics centers, yellow hotels, and green retail properties. A value of 200 on the vertical axis represents KRW 2 trillion. Cushman & Wakefield Korea.

Investment in logistics centers, hotels, and commercial facilities also focused on prime assets with stable tenant demand. Samsung SRA Asset Management acquired the Kendall Square Pyeongtaek Logistics Center in the southern region for KRW 343 billion. The 191,833-square-meter temperature-controlled facility is leased by SSG and Coupang. IGIS Value Plus REIT acquired Cheonghui Building, which houses Sotetsu Fresa Inn Seoul Myeongdong, for KRW 162.7 billion and plans to redevelop it as a hotel-focused asset. CJ Olive Young won a 660-square-meter site near Olive Young N Seongsu in Seongsu-dong with a bid of KRW 54.1 billion.

Kim Sugyeong, head of research at Cushman & Wakefield Korea, said, "Although rising interest rates have made the investment market as a whole more cautious, transactions with clear objectives, such as changing an asset's use or securing a headquarters, are continuing actively. Going forward, the key to closing a deal will be not only an asset's location and tenant stability, but also how its value can be increased."

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