Seoul office transaction volume surges 24% in 2024

Total investments hit KRW 11.6 trillion during the year.

According to a Savills report, Seoul’s office investment market rebounded in 2024, recording an annual transaction volume of KRW 11.6 trillion, a 24% increase from the previous year. This marked a reversal from the declining trend observed in prior years.

While the first half of the year was relatively weak compared to 2023, activity surged in the second half, with 8 out of the top 10 largest transactions by volume concentrated during this period.

Here’s more from Savills:

By investor type, financial investors accounted for 71% of total transactions, up from 63% in 2023. Meanwhile, the share of strategic investors and end-users decreased to 29%, though the figure still exceeded the 10-year average of 23%. In terms of capital source, domestic investors dominated the market, comprising 91% of total transaction volume—a 7 percentage point increase from the previous year and well above the 10-year average of 85%. Conversely, overseas investors’ share fell to 12%, down from 16% in 2023 and below the 10-year average of 15%.

The Seoul office market in 2024 exhibited more pronounced differentiation in cap rates based on district and asset characteristics. Stable prime offices in GBD traded at cap rates in the low-4% range on average, while secondary offices in areas such as Jamsil and Bundang recorded cap rates as high as 6.0%, highlighting significant disparities between asset classes.

The upward trend in unit prices per pyeong slowed alongside rent growth, signaling that the market has entered a stabilization phase. Following interest rate hikes in Q3/2022, cap rates for Seoul’s prime offices began to rise, reaching the mid-to-high 4% range by early-2024 with little fluctuation during the year.