Office vacancy rates will likely rise due to new supply in 2020, then stabilize downward
After peaking in 2020, new supply should decline in 2021, providing an opportunity for tenants to secure the benefit of long-term lease contracts of five years or more before market conditions change. The GBD area should keep the lowest vacancy among the three main districts thanks to firm demand and the success of Pangyo Techno Valley, a tech cluster near Seoul. Flexible workspaces have expanded beyond the GBD, a region which IT ventures or start-ups prefer, and are now found in the CBD and YBD. In addition, as new supply increases in the CBD and the YBD, tenants should consider relocating their offices from the GBD to the CBD and YBD in 2020 to obtain better benefits like rent-free periods.