Office and Commercial Real Estate Transactions Reach Record High of 210,000 Cases

High-Intensity Government Regulations Cause Housing Demand Drop
Commercial Real Estate Outlook Positive, Demand Expected to Increase
With Corona Optimism Also Plays a Role

[Asia Economy Reporter Hwang Seoyul] The volume of commercial real estate transactions, including offices and retail spaces, surpassed 200,000 cases last year. This is the highest level ever recorded since 2017. Analysts attribute this to the influx of liquidity into commercial facilities due to stringent housing regulations.

On the 16th, Real Today, a real estate research firm, analyzed real estate statistics from the Korea Real Estate Board and found that last year's nationwide commercial real estate transaction volume (excluding officetels from commercial and office use) reached 215,186 cases, surpassing the 2017 transaction volume of 206,483 cases. This figure is 40.5% higher than the previous year before the COVID-19 pandemic (153,637 cases).

The investment returns on commercial real estate are also on the rise. According to the Korea Real Estate Board's Commercial Real Estate Rental Trend Survey, the annual investment returns for medium-to-large retail spaces (7.02%), small-scale retail (6.12%), and collective retail (6.58%) all increased compared to the previous year. In particular, medium-to-large retail spaces recorded the highest annual investment return since 2008 (10.91%).

Real Today stated that due to successive stringent regulations, market demand has shifted investment directions toward commercial real estate. Commercial real estate is freer to resell compared to apartments and is not included in the housing count, thus exempt from multi-homeowner related taxation.

The commercial real estate market is expected to remain positive this year, likely increasing investment demand further. Recently, the Ministry of Land, Infrastructure and Transport proposed improvements to the building sales system, including measures to eradicate false and exaggerated advertising of income-generating real estate to protect buyers' rights and establish market order.

Another factor is the increase in investors aiming to secure commercial real estate in preparation for the With-Corona era as vaccination rates rise.

A Real Today official said, “As housing regulations such as increased capital gains tax on multi-homeowners and mandatory residence requirements have intensified, a large amount of investment funds have flowed into commercial real estate markets like commercial facilities. With growing expectations for daily life recovery, interest in commercial real estate will continue.”

This content was produced with the assistance of AI translation services.