Seoul sees robust office space demand from tech occupiers

Firms may consider Seongsu-dong, Guro and Gwacheon as new locations for expansion.

Seoul is a wealthy city with good infrastructure; it also has a reputation as an enjoyable city to live in. According to Colliers, the Gangnam business district, or GBD – one of Seoul’s three main business areas – is home to many big IT companies. Strong demand for space from technology occupiers in Seoul has spilled over from Gangnam to the Pangyo new city 10 to 12 kilometres to the south-east.

According to the OECD Digital Economic Outlook 2020, Korea ranked first in all areas of broadband infrastructure: 5G, fibre-optic broadband, download speed, and mobile data usage. E-commerce accounts for about 28% of total retail sales in Korea – a very high level. 

Colliers expects e-commerce, fintech and gaming to continue to grow, led by “unicorn” companies such as Coupang, Market Kurly, Krafton and Kakao Bank

Here’s more from Colliers:

Real estate & workplace considerations

Korean work practices, like the local culture, are traditionally very conservative. COVID-19 has forced companies to be more flexible in how they operate. 

While we cannot foresee wholesale changes happening as fast as in other markets, we recommend that companies embrace new ways of working in order to remain competitive, boost recruitment and become more attractive places to work. 

Outlook & recommendations 

Technology occupiers, especially in the gaming sector, are facing space shortages as their headcounts grow. As space is limited in Pangyo, we recommend Seongsu-dong, Guro and Gwacheon as new locations. 

Hongdae and Seongsu are popular with startups and attract spillover demand from Gangnam. Technology companies cluster around the Guro Digital Complex to form Guro Valley where land is cheaper, attracting company HQs. The Gwacheon technology cluster has formed around the Gwacheon Knowledge and Information Town in the southern part of Gyeonggi-do. 

In the established technology submarkets, the vacancy rate is much lower than in other districts of Seoul.