South Korea Office Real Estate Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

The South Korea Office Real Estate market is Segmented by Sector (Information Technology (IT and ITES), Manufacturing, BFSI (Banking, Financial Services, and Insurance), Consulting, and Other Services), and Key City (Seoul, Busan, Incheon, and Other Key Cities). The report offers market size and forecast in value (USD billion) for all the above segments.

Market Snapshot

South Korea Office Real Estate Market Growth
Study Period: 2018-2027
Base Year: 2021
CAGR: >5 %

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Market Overview

The South Korean office real estate market is expected to register a CAGR of more than 5% during the forecast period (2022-2027).

The COVID-19 pandemic affected the office real estate market in South Korea due to restrictions, social distancing policies, and work-from-home culture. Though the market is in a recovery phase, it is yet to reach the pre-pandemic levels. The growth of the sector is driven by increasing office space absorption, growth in leasing activities, declining vacancy rates, etc.

Seoul is emerging as a leader in the office real estate sector. Office buildings accounted for more than 70% of commercial property transactions in Seoul during Q2 2021. In addition, office building prices in Seoul experienced robust growth in Q2 2021, driven by increasing investments from domestic investors. Take-up of prime office spaces remained high in the country during Q3 2021. Most of the prime office spaces are absorbed by new organizations (with 27% absorption), secondary to prime (with 35% absorption), prime to prime (19%), and expanding existing organizations (20%).

Scope of the Report

Office real estate refers to the construction of buildings for leasing and selling purposes to companies from different sectors. The report aims to provide a detailed analysis of the South Korean office real estate market. It focuses on market insights, dynamics, technological trends, and government initiatives.

The market is segmented by sector and key city. The report offers market size and forecast in value (USD billion) for all the above segments.

By Sector
Information Technology (IT and ITES)
BFSI (Banking, Financial Services, and Insurance)
Other Services
By Key City
Other Cities

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Key Market Trends

Increasing Demand for Prime Office Spaces

Most of the demand for prime office spaces is observed in Seoul. In Q3 2021, the prime office vacancy rate fell by 1.9 ppts quarter-on-quarter to 9.9%. Also, net absorption increased by 163,200 sq.m on higher demand across all districts. Major business districts such as Central Business District (CBD), Gangnam Business District (GBD), and Yeouido Business District (YBD) absorbed most of the prime office spaces in the city.

In Central Business District, the vacancy rate fell by 1.1 ppts quarter-on-quarter to 11.2% in Q3 2021. In addition, net absorption rose by 66,700 sq.m despite the supply of 41,700 sq.m from K-Square Citi. However, high tenant preferences in GBD resulted in increasing net absorption space by 28,400 sq.m, and the vacancy rate declined by 8% in Q3 2021. Moreover, net absorption increased to 66,800 sq.m in YBD as tenants continued to move into new buildings supplied last year, further reducing vacancy by 4.0 ppts quarter-on-quarter to 11.9%.

However, in Q3 2021, the new office space supply increased as K-Square Citi finished remodeling in CBD, adding 41,700 sq.m of new supply. Meanwhile, Woongjin Group and Loca Mobility moved into K-Square after preleasing 40% of the building in Q2. Furthermore, average annual rents in CBD, GBD, and YBD experienced annual growth rates of 1.3%, 1.5%, and 2.7%, respectively.

Average Monthly Rents for Prime Office Spaces

Increasing Rental Prices of Office Spaces

The pandemic significantly impacted the South Korean office market. However, the market is recovering, with significant growth observed in office absorption in 2021. Rental prices for office spaces have been witnessing positive growth after the pandemic. Rising rental prices are driven by declining vacancy rates and increasing demand for office spaces from tech tenants, which are mainly expanding in the Gangnam area, the CBD, and Yeouido Business District.

Moreover, in Gangnam Business District, Grade A office spaces recorded a low vacancy rate in Q3 2021, as Centerfield, which was completed in Q1 2021, leased out its available space, signing a contract with Amazon. In addition, 10 floors vacated by Samsung Fire & Marine Insurance in The Asset Gangnam Tower were filled by PeopleFund and Naver. In the GBD area, not many options are available for tech tenants looking for Grade A office space, resulting in rising rental prices.

According to the Korea Real Estate Board statistics, Seoul and Gyeonggi provinces are leading in South Korea in terms of office space rental prices. In Q3 2021, the rental prices of office buildings in Seoul and Gyeonggi amounted to around KRW 22,400 per sq.m and KRW 11,800 per sq.m, respectively.

Rental Prices Of Office Spaces

Competitive Landscape

The office real estate market is fragmented. Large companies have advantages in terms of financial resources, while small companies can compete effectively by developing expertise in local markets. Some major companies include Hines, Brookfield Asset Management Inc., and Keangnam Enterprises Ltd.

Recent Developments

February 2022: Brookfield (a global investment giant) was planning to spin off part of its asset management business into a separate, ‘asset-light’ company worth up to USD 100 billion. The company added that its Asia-Pacific business is growing more rapidly than any other regional operations, heading toward USD 100 billion in total assets across Australia, China, Korea, Japan, and India.

February 2021: Hines (the international real estate firm) announced the expansion of the firm’s presence in Japan and South Korea. Since opening the Seoul and Tokyo offices in 2013 and 2017, respectively, Hines recently increased its headcount to seven in the two countries. The team is expected to nearly double by year-end as the offices increase focus on development and acquisitions in the respective economies.

Table of Contents


    1. 1.1 Study Deliverables

    2. 1.2 Scope of the Study




    1. 4.1 Market Overview

    2. 4.2 Market Dynamics

      1. 4.2.1 Drivers

      2. 4.2.2 Restraints

      3. 4.2.3 Opportunities

    3. 4.3 Government Regulations and Initiatives

    4. 4.4 Supply Chain/Value Chain Analysis

    5. 4.5 Porter's Five Forces Analysis

    6. 4.6 Technological Innovations in Office Real Estate Market

    7. 4.7 Impact of Remote Working on Space Demand

    8. 4.8 Insights into Key Office Real Estate Industry Metrics (Supply, Rentals, Prices, Occupancy/Vacancy (%))

    9. 4.9 Impact of COVID-19 on the Market


    1. 5.1 By Sector

      1. 5.1.1 Information Technology (IT and ITES)

      2. 5.1.2 Manufacturing

      3. 5.1.3 BFSI (Banking, Financial Services, and Insurance)

      4. 5.1.4 Consulting

      5. 5.1.5 Other Services

    2. 5.2 By Key City

      1. 5.2.1 Seoul

      2. 5.2.2 Incheon

      3. 5.2.3 Busan

      4. 5.2.4 Other Cities


    1. 6.1 Overview (Market Concentration and Major Players)

    2. 6.2 Company Profiles

      1. 6.2.1 Brookfield Asset Management Inc.

      2. 6.2.2 Hines

      3. 6.2.3 Arup

      4. 6.2.4 Keangnam Enterprises Ltd

      5. 6.2.5 SK D&D Co. Ltd

      6. 6.2.6 Hanwha Group

      7. 6.2.7 HYOSUNG

      8. 6.2.8 FIDES Development

      9. 6.2.9 Lotte Property & Development

      10. 6.2.10 Regus Group Companies*

    3. *List Not Exhaustive

  8. 8. APPENDIX

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Frequently Asked Questions

The South Korea Office Real Estate Market market is studied from 2018 - 2027.

The South Korea Office Real Estate Market is growing at a CAGR of >5% over the next 5 years.

Brookfield Asset Management Inc., Hines, Arup, Keangnam Enterprises Ltd, SK D&D Co. Ltd are the major companies operating in South Korea Office Real Estate Market.

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