Major issues and trends in the transaction and leasing market
Insights & Recommendations
Seoul’s office market, which is centered around three major districts, is seeing a decline in new supply and relentless expansion by tech tenants making it difficult for occupiers to efficiently find suitable space. Tenant demand is extending to new business districts that may supplement major districts. In addition, the spread of remote work and the increasing use of distributed offices are accelerating. Hybrid working is a major trend in the leasing market.
As both tech and biotech industry tenants continue expanding, we expect the current landlords’ market to continue in 2022. Furthermore, we expect that the upcoming business districts will continue to attract tenants relocating for wider options and more reasonable rental prices.
- We recommend tech tenants consider areas such as Pangyo, Bundang, Gwacheon, and Seongsu-dong and biotech industry tenants to consider Magok, and Songdo in Incheon as alternatives to Seoul’s city center.
- We recommend investors pursue a strategy based on macroeconomic conditions and ESG standards in response to rising interest rates. In addition, investors should prepare a strategy with a diverse asset base to prepare for fall in the return on investment (ROI) due to increasing interest rates and reduced liquidity.