Transition to landlords’ market & lowest vacancy in Gangnam since 2010
Insights & recommendations
While the vacancy rate continues to decrease, the Seoul office market, which has been a tenant-favoured market since 2010, has changed to a landlords’ market. The expansion of tech companies, including call centre operators, continued in Q4 2021. The relocation of pharmaceutical companies was also active. With diminishing tenant benefits, such as rent-free periods, and the market shift to a landlord-favourable market, we recommend tenants look outside of the Gangnam Business District, or develop new leasing strategies, such as the use of distributed offices using flexible workspace.
- As it is difficult to find available space in the GBD, which is preferred by tech tenants, an increasing number of IT platform and call centers operators are switching their interest to the CBD and YBD.
- Going forward, we expect the landlords’ market will continue for at least the next three years as volume of supply decreases and the economic recovery continues.