STABLE LEASING MARKET DESPITE NEW SUPPLY
Insights & Recommendations
- Expansion demand will probably decrease due to the uncertain economic conditions. Comparing to 2020, the amount of new supply coming online in 2021 is expected to be limited so we expect the Seoul office vacancy rate to stabilize.
- We recommend occupiers looking for space in the GBD area consider newly available space as large companies relocate out of Gangnam.
- We recommend tenants to proactively negotiate for leasing benefits in the YBD. With quality buildings offering tenants benefits like rent-free periods, demand was active as financial sector tenants moved their headquarters to new buildings in the YBD.
Q4 2020 highlights
Despite new supply in the YBD and several major corporations moving out of the CBD, average vacancy decreased only slightly in Q4 2020 due mainly to financial tenants relocating to large-scale office buildings, and the continuous expansion of tech tenants.