Gangnam and Yeouido vacancy rates in the 1% range ... Demand for A-grade offices remains firm

[Financial News] The average vacancy rate for A-grade offices in Seoul’s three major business districts declined from the previous quarter, according to a report. On the 21st, CBRE Korea, a commercial real estate services firm, released its “2026 Third-Quarter Seoul Commercial Real Estate Market Report,” which said the average vacancy rate for Seoul A-grade offices fell 1.1 percentage points to 3.1%.
Vacancy rates were 5.1% in the Central Business District, 1.0% in Gangnam and 1.7% in Yeouido. In particular, tenant demand remained firm in Gangnam and Yeouido, especially for prime assets. The vacancy rate in the Central Business District, which had risen after a large amount of new supply in the previous quarter, resumed its downward trend, supported by large single-tenant leases and a preference for prime assets.
In the Central Business District, the Serious Crimes Investigation Agency’s lease of the entire Rene Square building drove the decline in vacancies, with the deal accounting for about 82% of total leasing activity in the district in the third quarter. Gangnam, the most active of the three districts for leasing, saw IT companies account for 67% of the total. The shift by K-beauty companies from Grade B to prime assets was also notable, including Absolv Lab, which operates the skincare brand Celimax, moving into Centerfield. In Yeouido, relocations by luxury brand headquarters were also observed, alongside financial-sector demand, with activity centered on prime assets such as Parc1 Tower 1 and FKI Tower.
The retail market continued to grow, led by department stores and major high-street shopping districts, amid an increase in foreign tourists and rising consumer spending. The number of visitors to Korea through August reached 15.05 million, up 22% from the same period a year earlier, while foreign tourists’ card spending rose 49% to 14 trillion won. Seongsu’s vacancy rate fell 2.1 percentage points from the previous quarter to 1.3%, the lowest among major retail districts. With rents rising, demand for new store locations is spreading toward Seoul Forest and Konkuk University.
The Seoul metropolitan area’s A-grade logistics center market had received about 90% of the supply scheduled for the year by the third quarter, bringing annual supply effectively to its final stage. Third-party logistics (3PL) and e-commerce companies accounted for about 71% of new leases, with demand concentrated in major logistics hubs such as Incheon, Anseong and Icheon. The tenant base is gradually diversifying, particularly as K-beauty companies such as APR seek large spaces to automate logistics and expand their businesses.
Seoul’s commercial real estate investment volume in the third quarter was 9.6488 trillion won, up about 5% from the previous quarter but down about 4% from a year earlier. Cumulative investment through the third quarter was estimated at about 25 trillion won, similar to the record-high level for the same period in 2025.
Choi Su-hye, executive director and head of research at CBRE Korea, said, “Two increases in the base rate and rising borrowing costs are delaying some transactions and adding to upward pressure on yields. Since the number of transactions expected to close in the fourth quarter is limited compared with last year, annual investment volume this year is expected to fall below 2025 levels. Market differentiation based on fundamentals such as location and tenant stability will also become more pronounced going forward.”

[email protected] Jeon Min-kyung Reporter