Seoul prime office market records first contraction in a decade

Net absorption fell to -13,200sqm in 2025.

Seoul’s prime office market recorded its first annual contraction in a decade in 2025, with net absorption falling to –13,200 sq m, according to Savills.

Savills attributed the decline largely to significant vacancies in the CBD, where net absorption dropped by –69,700 sq m. This outweighed gains in other major districts and pushed the overall market into negative territory. The vacancies were primarily driven by the relocation of SK Group affiliates into SK-owned buildings and REIT-held assets, the report said.

While some of this space was later backfilled, the CBD remained the only major district to post negative absorption. In contrast, the YBD recorded positive net absorption of 37,400 sq m, supported by leasing activity at Anchor One and the refurbished One Centinel. The GBD also returned to growth, achieving 13,000 sq m of net absorption as vacant space was absorbed within two to three quarters.

Despite the disruption caused by large-scale vacancies, Seoul’s prime office vacancy rate remained relatively tight in the mid-3% range, reflecting strong backfilling activity, Savills noted.

Sectoral demand was led by financial firms, which accounted for 36% of total leasing activity in 2025, followed by IT/Tech at 22%. Wholesale and retail tenants made up 11%, while government-related demand rose to 9%, up from 3% a year earlier. Savills linked the increase in government leasing to the relocation of the Jongno-gu Office to K Twin Tower amid redevelopment works in the CBD.

Overall, Savills said the financial sector continued to anchor leasing demand, particularly in newer and refurbished assets in the YBD, helping stabilise the market despite the headline contraction.