Here’s how Seoul’s business districts are likely to perform in H2

Office leasing activity is expected to be subdued for the remainder of the year.

Seoul’s office property leasing market saw significant move-in activity from notable, large-scale tenants. However, Savills expects overall activity in the latter half of the year to be subdued given the lack of supply in the pipeline until the end of the year.

Here’s more from Savills: 

In the CBD, tenant activity in H2/2022 will likely be dynamic; Hyundai Capital (22,700 sq m) is relocating from Yeouido Hyundai Capital Headquarters to Grand Central and the General Insurance Association of Korea (7,600 sq m) is relocating to K-Twin Towers. Furthermore, prior lease agreements for the Korea Arts Management Service (6,500 sq m) at Twin Tree Tower and KTis (7,100 sq m) at K-Square Citi will apply further downward pressure on the vacancy rate. 

In the Gangnam Business District (GBD), there are few remaining vacancies and therefore tenant movement is likely to dwindle. Shinsegae Group affiliates (7,300 sq m) and BAT Rothmans are taking space in Centerfield. The space vacated by BAT Rothmans at is expected to be filled by CLO Virtual Fashion. With a vacancy rate of 1% in the GBD, new vacancies have filled rapidly given the strong tenant demand, resulting in higher rents when agreeing new lease contracts.

Lastly for the Yeouido Business District (YBD), LG Energy Solution (10,200 sq m) is taking more space at Parc.1 Tower 1, while Leading Investment & Securities (6,400 sq m) and Magnachip Semiconductor (3,200 sq m) are moving to Parc.1 Tower 2, which will lower the vacancy rate further in the YBD. 

Throughout the course of the pandemic, selected industries performed better than others; online businesses have benefitted from online service expansion, which has resulted in new demand for office space. Similarly, there is increased demand for Seoul prime offices from call centers and foreign affiliates that had reduced their occupational footprint due to the COVID-19 outbreak.