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Seoul MarketBeat

Jinwoo Jung • 08/02/2024
Cushman & Wakefield MarketBeat reports analyze quarterly economic and commercial real estate activity including supply, demand and pricing trends at the market and submarket levels.

Retail: The citywide average high street vacancy rate recorded 18.7% in Q4, down 4.4 pp y-o-y. Myeong-dong district saw the largest fall in vacancy, down 33.0 pp y-o-y to 9.4%, regaining its status as the lowest vacancy rate district among the six major commercial areas. With uncertainty in the retail market expected to remain high in 2024, it will require positive factors to spur demand, such as an expected interest rate cut and economic recovery, and additional inflows of international travelers.

Office: Overall Grade A office vacancy in Q4 rose 0.4 pp q-o-q to record 2.6%. The vacancy rate increased slightly in all submarkets, with a significant rise in the CBD submarket leading the overall vacancy rate. The average monthly rental level rose 1.0% q-o-q and 6.0% y-o-y, while management fees also climbed 0.9% q-o-q and 3.2% y-o-y. Office tenants are currently experiencing an increase in occupancy costs. With limited new supply, corporate demand for prime office space will remain strong and rents are expected to rise further this year.

Investment: Eight office building transactions closed in Seoul and Bundang in Q3, with a total transaction volume of KRW2.0 trillion. Although this is still down 35% y-o-y, transaction activity predominantly involved assets that had experienced selling challenges due to the high interest rate environment seen since Q2 2022. In addition, office capitalization rate has continued to rise as office sales prices have stopped rising due to a decrease in the gap between sellers’ and buyers’ pricing expectations. The full-year 2023 overall transaction volume is still forecast to drop significantly y-o-y due to the high interest rate environment.

Data Center: In the first half of 2023, seven data center pipelines obtained new building permits and five have completed the commencement notice in the Great Seoul Area (GSA). Asset managers, telecommunications companies, and data center REITs have now been joined by domestic construction companies and small and medium-sized developers taking on the challenge of developing data centers.

While the Dispersed Energy Promotion Special Act, passed by the National Assembly in May, will raise operation burden for data centers located in the GSA, the demand and value of data centers in the GSA are expected to continue to rise due to the difficulty of relocation to non-GSAs by service providers that require low latency.

Learn more by clicking our most recent Seoul MarketBeat reports below.

 

CURRENT MARKETBEATS

Shopping Retail
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Retail MarketBeat Report

Cushman & Wakefield's Q4 2023 Seoul Retail MarketBeat report is now available to download. Please click on the link to read our latest report.
Jinwoo Jung • 08/02/2024
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Investment MarketBeat Report

Cushman & Wakefield's Q3 2023 Seoul Investment MarketBeat report is now available to download. Please click on the link to read our latest report.
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Cushman & Wakefield MarketBeat reports analyze quarterly economic and commercial real estate activity including supply, demand and pricing trends at the market and submarket levels.
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Cushman & Wakefield's Q4 2023 Seoul Office MarketBeat report is now available to download. Please click on the link to read our latest report.
Jinwoo Jung • 25/01/2024

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