Korea’s Q1 office transaction volume hits USD3.6b

The largest deal that is still ongoing is worth USD3.2b.

Korea’s office property sector recorded KRW4.5 trillion (USD3.6 billion) worth of office transactions in the first quarter of 2022. 

According to Colliers, Mirae Asset Management and Krafton Consortium purchased Shinsegae Group E-Mart’s headquarters office building in Seongsu-dong in a deal worth more than KRW1 trillion (USD816 million). 

Krafton plans to develop Krafton Town by purchasing additional real estate near the E-Mart Seongsu-dong site. Alpharium Tower, a landmark office building in Pangyo Techno Valley near Seoul, was sold for KRW1.02 trillion (USD853 million). 

Here’s more from Colliers:

The largest ongoing deal involves the Brookfield-owned IFC building in Yeouido. It is expected to be sold for approximately KRW4 trillion (USD3.2 billion). Among the other deals scheduled to take place this year involve Jongro Tower in the CBD and Apro Square in Gangnam.

Forecast

We expect an overall decrease in office investment opportunities though this is not because the office sector is falling out of favour among investors. Instead, investors are becoming more cautious and declining opportunities to purchase assets at a time when interest rates are rising. Nonetheless, office prices per pyeong (approximately 35.6 sq ft) are expected to maintain an upward trend, mainly in the Gangnam area, due to continued demand from tech sector tenants.