"Downtown Area Price Surpasses 100,000 KRW per Pyeong"... Seoul Office Rent Rises 9% in Q1

Building view near Gwanghwamun [Photo by Yonhap News]

The average office rent in Seoul for the first quarter of this year was found to have increased by 9% compared to the same period last year.

According to the '2023 Q1 Office Market Report' released by RSquare, a commercial real estate specialist company, the average nominal rent per 3.3㎡ for Seoul offices (rent without applying free rent, etc.) was 88,000 KRW, up 9.0% from the first quarter of last year.

In particular, rents for medium to large offices with a total floor area between 9,900 and 33,000㎡ (3,000 to 10,000 pyeong) rose by more than 10% compared to the same period last year. RSquare explained, "Despite the rental market boom in recent years, the rent increase for medium to large buildings, which had not risen significantly, has sharply increased over the past year."

By district, the nominal rent in the CBD (Central Business District) reached 102,905 KRW, surpassing 100,000 KRW for the first time among major districts. This is a 6.8% increase compared to the same period last year. The nominal rent in the GBD (Gangnam Business District) was 97,179 KRW, rising 11.8% from a year ago, marking the largest increase among major districts.

Although the Seoul office lease market continues to be strong, the combination of rising rents and economic downturn has recently led to a slowdown in tenant demand. The total transaction amount for office buildings in the Seoul and Bundang districts in the first quarter was about 1.2 trillion KRW, which is only 40% of the previous quarter. This is the lowest amount in the past five years for a first quarter.

Jin Wonchang, head of the Big Data Consulting Team, said, "Office rents have risen sharply in major districts centered on the GBD, increasing tenant fatigue," adding, "With the worsening domestic and international economy, this is leading to a slowdown in office tenant demand."

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