Seoul office vacancy rate down to 2.8% in Q1

Yeouido saw the largest improvement in vacancies.

In the Seoul CBD, Project 107 (formerly Cho-dong Gas Station Site) was completed in the first quarter of 2025, providing an office GFA of about 10,291 pyeong.

According to JLL, the overall vacancy rate was 2.8%, decreasing by 55 bps q-o-q. Yeouido saw the largest improvement of 249 bps q-o-q, noting 4.3%, as the newly supplied building, Anchor 1, reached full occupancy. The CBD and Gangnam logged 3.0% and 1.4%, respectively.

Here’s more from JLL:

Quarterly net take-up reached 10,700 pyeong, positive in all submarkets except Gangnam. Yeouido led with 13,200 pyeong with move-ins at recent completions. The CBD followed with 2,800 pyeong, while Gangnam recorded -5,300 pyeong, as it awaits move-ins at Center Field.

Gangnam saw the largest quarterly deal in ICON Samseong, with iMarket Korea leasing four floors. In Yeouido, Anchor 1 filled its last vacant floor through an internal expansion, achieving full occupancy.

Office deals surpass KRW 4.0 trillion for the third straight quarter amid lower rates

Seoul’s net effective rent was KRW 143,098 per pyeong per month, up 1.3% q-o-q. The CBD and Yeouido saw rent increases due to seasonal factors, reaching KRW 148,574 and 123,868, respectively. Gangnam’s rent fell slightly by 0.2% to KRW 152,635, due to rent-free period expansion.

This quarter saw office deal volume of around KRW 4.9 trillion. The most prominent transaction was One Grove (CP4) in Magok, pre-purchased by IGIS Asset Management backed by NPS for approximately KRW 1.8 trillion for the office segment.

Outlook: Improved financial environment poised to attract overseas capital

For budget-constrained tenants, alternative locations offering lower rents, such as Magok, have prompted departures from traditional core submarkets. There are scheduled departures of some tenants, particularly in the CBD, which could slightly raise its vacancy rate.

BOK’s rate cut in February and the implication of further rate cuts in 2025 may lower senior loan rates for offices. With lowered financing costs and favourable exchange rates, foreign capital is expected to more actively pursue office investment opportunities.