Seoul prime office rents up 2.7% in Q2

The Gangnam Business District saw the highest growth of 4%.

The average face rent of prime offices in Seoul rose 2.7% YoY to KRW106,700/ pyeong. According to Savills, there is notable growth in each major business district of 1.8% YoY in the CBD, 2.8% in the Yeouido Business District (YBD) and 4.0% in the Gangnam Business District (GBD). 

Here’s more from Savills:

Average quarter-on-quarter uprise in face rents was 5%, 12%, and 9% for the buildings that witnessed rental hikes this period across each of the districts, CBD, GBD and YBD, respectively. 

The near-zero vacancy at GBD allowed landlords to renegotiate at much higher rents on re-letting. The average number of rent-free periods dropped from 2~4 months per year to 1~2 months on the backfill of vacancies in all districts. 

The average maintenance fee across all business districts was up 2.9% YoY to KRW43,600/pyeong. By district, the growth rate showed year-on-year growth of 2.3% in the CBD, 3.7% in the GBD and 3.1% in the YBD, which was at a faster pace than the rent. Rental growth for the GBD surpassed the rate of change in maintenance fees, leading to lower vacancy and higher rents in all districts.