In the second quarter of this year, the Seoul office sales market rebounded. The total sales amount for office buildings exceeded 1.7 trillion won, with office sales transactions increasing by over 400% compared to the previous quarter.
According to a report released on August 11 by Real Estate Planet, the number of office building sales transactions in Seoul for Q2 was recorded at 26, with a total transaction amount of 1.7717 trillion won. This represents an 8.3% increase in transaction volume and a 79.3% increase in transaction amount compared to the previous quarter, which had 24 transactions totaling 988.2 billion won.
However, compared to the same period last year, transaction volume decreased by 7.1% and transaction amount fell by 40.5%.
Regionally, the Yeouido area (YBD) saw a significant increase in transaction amounts. The 'Hana Securities Building' was sold for 811.2 billion won, marking a staggering 4,816.4% increase from the previous quarter.
In the Central Business District (CBD), the 'Orange Center' in Jung-gu was sold for 350 billion won, while the 'Hana Insurance Building' in Jongno-gu fetched 136.9 billion won. Consequently, the total transaction amount in the CBD reached 701.9 billion won, a 910.4% increase from the previous quarter.
In contrast, the Gangnam Business District (GBD) experienced declines in both transaction volume and amount. The Gangnam-Seocho area recorded six transactions totaling 128.3 billion won, down 14.3% in volume and 64.5% in amount from the previous quarter.
The office sales market also expanded significantly. In Q2, the number of office transactions in Seoul reached 360, with a total transaction amount of 2.5956 trillion won, representing increases of 30.4% in volume and 417.6% in amount compared to the previous quarter.
The surge in office transaction amounts was largely driven by large-scale deals. In Insadong, Jongno-gu, 33 transactions worth approximately 1.4198 trillion won were recorded at 'G1 SEOUL', while 45 transactions at 'G-Tower' in Guro-gu totaled 573.4 billion won, and 18 transactions at 'Eulji Twin Towers' in Jung-gu amounted to 442.4 billion won.
The proportion of corporate transactions was also high. In Q2, corporate transactions accounted for 1.5996 trillion won, or 90.3% of the total office building transaction amount. For offices, corporate transactions reached 2.4934 trillion won, making up 96.1% of the total.
The total asset size of domestic REITs also increased. As of June, the total assets of domestic REITs amounted to 127.49 trillion won, a 3.45% increase from the previous quarter. By asset type, residential properties accounted for 43.7%, offices 34.7%, logistics 6.5%, and retail 6.3%.
Supply indicators also showed improvement. The total floor area approved for office facility use in Q2 was 443,774 square meters, a 102.0% increase from the previous quarter. The total floor area for building permits was 482,788 square meters, up 5.8%, and the number of building permits issued rose by 51.9% to 41.
Despite concerns over high interest rates and economic slowdown, large corporate transactions are driving the market, leading to varying demand across different regions in the Seoul office market.
Jung Soo-min, CEO of Real Estate Planet, stated, “In Q2, corporate transactions accounted for 90.3% of the total office building transaction amount and 96.1% of the total office transactions, indicating a significant share.” He added, “On the supply side, both the number and floor area of building permits for office facilities have increased, and the approved floor area has more than doubled compared to the previous quarter. With large office supplies and sales continuing in urban areas, we expect large transactions to persist in the future.”
* This article has been translated by AI.
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