Seoul office deals reach KRW5.1t in Q2 despite cautious investment climate

Owner-occupiers underpin Seoul office investment activity.

Seoul's office investment market remained resilient in the second quarter of 2026 despite softer transaction volumes, with investors continuing to target high-quality assets and owner-occupier opportunities, according to Savills.

Savills reported that office transaction volume totalled approximately KRW5.1 trillion in Q2 2026, including the IFC Seoul transaction, down 13% from KRW5.8 trillion in the corresponding period last year. While several major deals were completed, activity remained below the record quarterly volume achieved in Q2 2025.

According to Savills, investors have adopted a more cautious approach amid ongoing financial market uncertainty and elevated financing costs. However, demand has remained focused on premium assets with secure long-term tenants, while value-add opportunities offering rental growth potential have also attracted interest.

Savills expects transaction activity to gradually improve as interest rate conditions and financing markets stabilise and blind funds established since 2025 begin deploying capital.

Among the quarter's major transactions, Hana Alternative AMC acquired the Hana Securities Building in Yeouido Business District (YBD) for KRW811.2 billion, allowing anchor tenant Hana Securities to regain ownership of its former headquarters after selling the asset in 2015. Savills said the transaction set a record price of around KRW38.4 million per pyeong on a gross floor area basis for a YBD office asset, highlighting strong owner-occupier demand for prime headquarters buildings.

Other notable deals included Pacific AMC's KRW657.0 billion acquisition of Eulji Twin Tower West and its retail component from KT IMC, supported by a long-term master lease with Daewoo E&C, and Gvesco IMC's purchase of Guro G-Tower for approximately KRW697.7 billion. Hanwha AMC, through Hanwha REITs, also acquired E-Mart Tower in the CBD for KRW350.0 billion, with Savills noting the building's long-term lease to E-Mart made it an attractive core asset for a REIT portfolio.

Savills estimated Seoul's prime office capitalisation rates remained in the mid-to-high 4% range based on nominal rents and the low 4% range on an effective rent basis. While higher Korean government bond yields have increased upward pressure on cap rates, the consultancy said transaction pricing has so far shown only limited adjustment. Savills added that cap rates could continue to rise gradually if interest rates and financing costs remain elevated.