Savills "Office Transactions Reach 8.5 Trillion in First Half, 73% of Last Year's Total Transactions"

[Financial News] It was revealed that the office transaction volume in Seoul in the first half of this year reached 73% of last year's total transaction volume.
On the 6th, the global real estate service company Savills Korea announced this analysis result through the Seoul Prime Office Report for the second quarter of this year.
According to Savills Korea, the transaction volume of Seoul offices recorded about 5.8 trillion won as large transactions over 500 billion won were concluded. Including the first quarter, the total transaction volume for the first half reached 8.5 trillion won, already exceeding 70% of last year's total transaction volume for four years.
Major cases include the KDB Life Tower near Seoul Station acquired by CJ Olive Young, the Gangnam N Tower acquired by Bithumb through acquiring shares of a REIT operated by KB Real Estate Trust, and the SI Tower, which recorded the highest transaction volume in the first half with a sales price of about 897.1 billion won.
Approximately 49% of office purchases in the second quarter were from strategic investors (SI) and end-users, which is a notable feature. This is analyzed to be a very high level compared to the average of about 26% over the past three years, indicating that demand based on actual needs is steadily maintained in the market.
The advance of domestic SIs and end-users continues, and it was found that foreign capital's investment in the Seoul office market was limited, following last year. The only prime office investment by foreign investors in the first half was the 'G-Valley Plaza' in Guro, in which GIC participated as an equity investor. However, it is expected that investment reviews for prime-grade offices will become active starting from the third quarter.
The vacancy rate of Seoul prime offices in the second quarter was surveyed at 4.0%, an increase of 0.6%p compared to the previous quarter. By region, the vacancy rates of CBD and YBD slightly increased to 4.0% and 4.3%, respectively, while GDB continued to maintain a very low vacancy rate of 2.3%.
Major tenants who completed relocations before this period include Korean Reinsurance Company, Starbucks Korea, and the Bank of Korea. Korean Reinsurance Company moved to Signature Tower as it entered the building reconstruction project, and the Bank of Korea also moved to Icon Samsung due to the reconstruction of the Gangnam headquarters. Starbucks Korea moved from CBD to GDB Centerfield along with Shinsegae I&C, resolving the vacancy caused by SSG.com moving to Yeongdeungpo.
By region, the rental rate increase in YBD was the most prominent at 4.9%, continuing from the previous quarter, while the rental rate increases in CBD and GBD were 2.8% and 2.7%, respectively. The trend of slowing rental rate increases continues due to the slowdown in inflation since 2023.

ming@fnnews.com Jeon Min-kyung Reporter