Seoul office market outlook and major trends
Summary & Recommendations
Decentralization has become a prominent trend in the Seoul office market. The original structure of the market was defined by three industry clusters and the three key submarkets of Gangnam, Yeouido, and the CBD. The market is changing shape as major companies increasingly move between submarkets and as public institutions relocate out of the city. In addition, Covid-19 has prompted more companies to establish shared offices and satellite offices, causing decentralization to accelerate.
- We expect tech tenants to continue to prefer the Gangnam area. We recommend tech tenants to watch for leasing opportunities created by large corporations relocating out of the GBD.
- Beyond the GBD we recommend tech tenants consider the Pangyo area for expansion and for biotech-industry tenants to consider Magok district as increasingly viable alternatives.
- In 2021, with new buildings scheduled for completion, we expect a tenant-friendly market to persist in Yeouido. Therefore, tenants should leverage opportunities to save costs, such as rent-free periods for new office tenants.