Seoul office investment transactions up 6% in Q1

Learn more about some of the key deals during the quarter.

In Q1/2025, Seoul office transaction volume reached approximately KRW 2.7 trillion, up about 6% year-on-year, according to data from a Savills report.

The quarterly figure only includes volume from completed hard asset deals and does not account for forward purchase transactions, such as IGIS AMC and KT AMC’s acquisitions of One Grove and Le West City Tower A & B in the Magok office district.

“Nonetheless, with a substantial amount of investable office assets available in the market, investor interests shall remain robust after a strong start in the beginning of the year,” the report added.

Here’s more from Savills:

Most of the recent transactions focused on owner-occupiers, strategic investors, and value-add repositioning opportunities. Though the market has also seen a noticeable uptick in both interest and actual transactions involving core assets by financial investors. The establishment of new blind funds by the National Pension Service and Korea Post in 1H/2025 is expected to boost market liquidity and support financial investor-led office transactions.

The quarter saw several major transactions taking place, including the sale of Namsan Square in the CBD for KRW 580.5 billion (KRW 25.5 million/ py). Originally acquired by IGIS Asset Management and KKR in 2019 for KRW 505.0 billion, the 72,252 sqm asset was sold to HDC Asset Management through a competitive bidding process.

Its key tenants include the Korea Health Promotion Institute and TKG Huchems. HDC AMC, the buyer, is reportedly planning further capital investment to maximize synergies with the large-scale redevelopment projects underway in the Seoul Station area.

Meanwhile, LB Asset Management acquired Crystal Square in the CBD from UK-based manager Aberdeen Investments for KRW 206.2 billion (KRW 37.0 million/py). The building had attracted interest from strategic investors such as Leadcorp (an M2N affiliate), as the lease of its anchor tenant, KB Kookmin Card’s IT division, would expire in 2026 and present a strong potential for rental upside. Completed in 2021, the building offers excellent access to Euljiro 3-ga Station (Lines 2 and 3) and features modern design, attracting attention among buyers seeking headquarters space in the current market.

Gangnam Finance Plaza also changed hands during the quarter. It was purchased by Gravity Asset Management from Mastern Investment Management for KRW 270.6 billion (KRW 37.0 million/ py). Located within a five-minute walk of Seolleung Station, the asset has steadily increased in value over the past decade through major facility upgrades, including system replacements, lobby and restroom renovations, and elevator modernization. Its prime location and well-maintained condition proved particularly attractive given the limited new supply in GBD.

As of Q1/2025, prime office cap rates in Seoul stand in the mid-to-high 4% range based on face rents. After factoring in tenant incentives such as rent-free periods, effective cap rates fall to the low-4% range, with assets in GBD trading as low as the mid- to high-3% range due to strong rental upside potential and active participation from strategic investors.

Cost-wise, senior mortgage interest rates for offices fell from around 5% in early 2024 to the low-4% range by year-end. Some assets closing in 1H/2025 reportedly being negotiated in the high-3% to low-4% range.