Retail: The retail market has revived alongside the general post-COVID recovery as new stores open across Seoul’s major commercial districts. Average high street vacancy recorded 21.4% in Q1 2023, down 4.0 pp y-o-y. Myeongdong district has been rapidly recovering as international tourists have returned, and global brands, including Apple and Five Guys, have been making inroads into Gangnam district.
Office: Overall Grade A office vacancy in Q1 rose 0.2 pp q-o-q to 2.6%. Rent rose 2.6% q-o-q and 9.4% y-o-y, steadily increasing due to inflation and low vacancy. With limited supply this year, the vacancy rate is expected to remain flat, with the current landlord-favorable market expected to continue.
Investment: Office sector investment volume in Seoul and Bundang totaled approximately KRW1.0 trillion in Q1 2023. Following the interest rate hikes commencing in 2022, the Q1 transaction volume was the lowest since 2015. Global financial market jitters have been amplified by the Silicon Valley Bank(SVB) collapse in March; however, SVB’s collapse is expected to have a relatively limited impact on the Korea market.
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