This Seoul district just saw its highest office rental growth since 2008

Rents grew 8.7% in Q3 in this area.

In Q3/2022, a Savills report says the average Seoul prime office face rent rose 4.3% YoY to KRW 108,500/pyeong. 

By district, average rent rose 2.0%p YoY in CBD, 2.6%p YoY in Yeouido Business District (YBD), while rental growth for Gangnam Business District (GBD) was 8.7% YoY, the highest figure since 9.0% in Q4/2008. 

Here’s more from Savills:

The average quarter-on-quarter growth in face rents was 5.0%p for CBD, 26.9%p for GBD, and 6.8%p for YBD. In GBD, approximately six office buildings that had been fully occupied for long periods have recently renewed contracts at face rents of c. 10-60% higher than previous terms. 

With the current leasing market favouring landlords, average rent-free periods offered to tenants decreased across all districts to a maximum of 1-2 months per year. Until new supply comes online in 2023, vacancy is forecast to drop further, pushing up rents. 

The average maintenance fee across all business districts was up 3.8%p YoY to KRW 44,000/pyeong. In comparison, the growth rate showed year-on-year growth of 2.5%p in CBD, 5.8%p in GBD, and 3.3%p in YBD. Notably, the growth in rents and maintenance fees for GBD was approximately double the pace demonstrated in the other districts.