Seoul prime office rental prices surpassed Tokyo for the first time since Q2 2024, reaching $93.28 per square foot annually in Q3 compared to Tokyo's $92.81, according to Knight Frank's Asia Pacific Office Highlight report released on the 27th. The increase was driven by continuous tenant demand from global AI and tech companies amid constrained office supply. Seoul ranked fourth in the Asia-Pacific region for prime office rents, with monthly rates reaching ₩46,714 per square meter, representing a 5.2% year-over-year increase.
Seoul Office Rents Exceed Tokyo at $93.28 Per Square Foot
Knight Frank's Q3 report showed Seoul prime office annual rent at $93.28 per square foot, surpassing Tokyo's $92.81. This marked Seoul's first time exceeding Tokyo since Q2 2024. Monthly rent per square meter reached ₩46,714 according to Knight Frank, ₩40,923 per Colliers, and ₩40,510 per Newmark.
Colliers stated that continuous occupancy and expansion by public institutions, financial and insurance companies, and large corporations into new prime offices within the Central Business District (CBD) maintained a low vacancy rate of 4.1%, supporting the upward rent trajectory. Newmark explained that nominal rent increases continued around core assets as companies strongly preferred Grade-A prime offices with superior location and building quality.
Seoul Office Vacancy Rates Remain Below 7% Across Districts
Seoul office vacancy rates in the CBD ranged from 6.3% to 7.0%. MetLife moved into G1 Seoul, the National Investigation Headquarters for Serious Crimes entered Le Nez Square, and Seoul City Hall, the Constitutional Court, and McDonald's headquarters occupied spaces, absorbing large existing vacancies.
The Gangnam Business District (GBD) recorded very low vacancy rates of 2.0% to 3.4%, with global and tech companies including Tesla, Anthropic, and Sanofi entering Centerfield, demonstrating clear preference for quality assets.
The Yeouido Business District (YBD) had the lowest vacancy rate among the three major districts at 2.3% to 3.0%. Aegis Asset Management moved into Parkone Tower 1 and Mirae Asset affiliates entered FKI Tower, steadily accommodating financial sector expansion and relocation demand.
Metropolitan Office Transactions Reach ₩6.4 Trillion in Q3
According to Colliers, Q3 metropolitan office transaction volume totaled approximately ₩6.4 trillion, with 54.6% occurring in the CBD.
G1 Seoul recorded the largest Q3 transaction when Mirae Asset Management acquired it for approximately ₩1.532 trillion through a blind fund invested by the Korea Post. MDM Asset Management purchased Fine Avenue Building A for ₩800 billion under sale-and-leaseback terms with Shinhan Card, and KB Asset Management bought Semicolon Mullae for ₩614.8 billion.
Gangnam 358 Tower, purchased by Hyunsong Education and Culture Foundation for ₩445 billion, recorded the highest price per pyeong at ₩45.01 million.
Yield rates increased slightly. According to JLL, Seoul office cap rate in Q3 was 4.2%, up 0.1 percentage point from the previous quarter, with a spread of 0.3 percentage points over the 3-year government bond rate (3.9%).
JLL explained that despite market interest rate pressure, movements to secure quality assets with verified tenant stability continue through blind funds receiving institutional investor contributions, public REITs, and special purpose companies (SPCs).
FAQ
What was Seoul's prime office rental price in Q3?
Seoul prime office annual rent reached $93.28 per square foot in Q3, surpassing Tokyo's $92.81 per square foot according to Knight Frank's Asia Pacific Office Highlight report released on the 27th.
What was the Q3 transaction volume for metropolitan offices?
Q3 metropolitan office transaction volume totaled approximately ₩6.4 trillion according to Colliers, with 54.6% of transactions occurring in the Central Business District.
