Seoul Q2 office transaction volume grows 1.5x higher than 2024 levels

Total investment volume hit KRW5.8 trillion or USD4.2 billion.

According to a recent report from Savills, in Q2/2025, Seoul office transaction volume reached KRW5.8 trillion—1.5 times higher than the same period last year. Cumulatively, volume totaled KRW8.5 trillion in 1H/2025, equivalent to 73% of the total in 2024 (KRW11.2 trillion).

“Six prime office transactions exceeding KRW500 billion each including SI Tower, Gangnam N Tower, and KDB Life Tower were completed, significantly boosting quarterly transaction volume,” the report said.

Here’s more from Savills:

In Q2/2025, 49% of Seoul’s office transaction volume was driven by owner occupiers and strategic investors, nearly double the three-year average of 26%. This reflects continued strong demand for self-use assets. Foreign investor activity remained subdued, with only one prime office acquisition recorded in the first half—the purchase of G-Valley Plaza in Guro by GIC. Rather than indicating a retreat in foreign capital appetite for Korean office assets,recent market activity reflects stronger bid prices from domestic strategic investors and end-users.

Looking ahead to Q3/2025, several notable transactions are in the pipeline. Multiple foreign investors remain actively engaged, participating in bids for prime office assets and conducting internal assessments of potential opportunities.

In the CBD, Koramco AMC acquired Crescendo building from DWS AMC for KRW556.7 billion (KRW33.7 million/py). The building has been fully occupied by Kim&Chang since 2019, with the lease agreement extending to 2029. The asset attracted strong investor interest due to its stable rental income, suitable size for potential owner-occupancy, and upside potential through rental reversion. The acquisition was completed by Koramco REITs Management and Trust via a blind REIT funded by POBA.

CJ Olive Young, occupying 40% of KDB Life Tower for its headquarters since 2021, acquired its building from KB AMC for KRW674.4 billion (KRW27.2 million/ py). With leases set to expire from 2026, the company pursued ownership as an end-user to secure long-term control over its core office space in line with its continued growth trajectory.

In the GBD, Hyundai Motor Company acquired the remaining 50% stake in Tiger Alternative Private Real Estate Trust No. 318 from Jae Kwon for KRW410.9 billion (KRW55.0 million/py), matching the 2023 purchase price. This secured full ownership of Scale Tower, which has served as its Gangnam office since 2023. The acquisition was driven by the need to secure long-term office space due to ongoing delays in the GBC development project.

IGIS AMC acquired SI Tower from KB AMC for KRW897.1 billion (KRW44.8 million/py) through a blind fund backed byKTCU.The asset, with aGFAexceeding 66,000sq m, is strategically located at the Teheran-ro intersection near Yeoksam Station. Approximately 70% of the leasable area is occupied by Hyundai Mobis, with other major tenants such as Nokia and Seoul Guarantee Insurance contributing to a 0% vacancy rate. 

Despite the elevated pricing, the property attracted competitive bidding, supported by its strong leasing profile and prime location.It marked the highest transaction price in 1H/2025. Alongside BNK Digital Tower in the GBD, SI Tower is reflected as a leading transaction case acquired by financial investors this quarter.

In the YBD, Hyundai Motors acquired its headquarters building, the Hyundai Motor Securities Building, via a share-deal for KRW354.8 billion (KRW29.0 million/py). Although BNK AMC was initially selected as the preferred bidder through a public tender in February, Hyundai Motors exercised its right of first refusal to finalize the deal. 

With 60% of the leasable area occupied by Hyundai Motor Securities and major tenants like KB Securities and Shinhan Fund Partners, the property maintains strong occupancy. Located within the “Yeouido Financial Hub District Plan,” the site offers significant redevelopment potential, with a current FAR of 700% well below the 1,600% zoning limit positioning it for long-term value enhancement.

In Q2/2025, prime office cap rates in Seoul remained in the mid-to-high 4% range, with effective cap rates falling to the low-to-mid 4% range after accounting for tenant incentives. Five-year Treasury bond yields declined slightly to 2.5%, resulting in a cap rate spread of 230 bps on a face rent basis. 

Senior mortgage rates, which were in the low-to-mid 4% range in Q4/2024, have eased to the high-3% to low4% range in Q2/2025. With upcoming capital gain disposals and refinancing of matured funds expected in 2H/2025, sustained buyer demand for core assets is likely to maintain cap rates stable.