Seoul’s 2025 office investment volumes to breach 2024 totals

Transaction volume is expected to reach KRW 13 trillion this year.

In a recent report, Savills noted that the transaction volume for Seoul’s office market in 2025 is projected to come in at c. KRW 13 trillion, surpassing the KRW 11.6 trillion recorded in 2024.

“A significant number of properties remain available across major districts, and assets that were withdrawn from the market in 2023–2024 may re-enter this year. Additionally, with transaction closing periods becoming increasingly prolonged, fund-owned assets acquired after 2020 are approaching maturity and may be considered for early sale,” the report said.

Here’s more from Savills:

The growth of corporate-sponsored REITs is also anticipated to contribute to increased office transaction activity in 2025. Large conglomerates such as SK, Hanwha, and Lotte, along with some mid-sized companies, are advancing efforts to monetize their real estate holdings through REITs establishment. Institutional investors are also expected to continue acquiring high-quality office assets to maintain portfolio allocation ratios.

Macroeconomic factors are likely to positively drive activity in the investment market. The Bank of Korea has signaled the possibility of additional interest rate cuts within the year due to concerns over a domestic economic slowdown. Simultaneously, the depreciation of the Korean won is improving conditions for foreign investors seeking opportunities in Korea’s office market.

In the CBD, delays in development projects around Euljiro and Sewoon District are expected to contribute to a rise in forward purchase deals. Against this backdrop, investors are likely to focus on Core and Value-add assets in 2025, continuing the trend from 2024. Despite rising vacancy rates and operating costs, the scarcity of high-quality prime assets is expected to sustain or even drive up unit prices per pyeong. Consequently, cap rate is forecasted to decline slightly year-on-year, settling at around 4.0~4.5%.

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