Seoul office sales rebound for first time in 4 years in 2024

The Seoul office market bounced back for the first time in four years in 2024, with transaction volume soaring 78.7% to 13.4 trillion won ($9.1 billion) from the year prior, according to GenstarMate, a South Korean real estate research firm.

Core office buildings in the Gangnam business district (GBD) and the central business district (CBD) accounted for 80% of transactions, led by The Asset, which marked the country’s largest commercial building sale in 2024.

Koramco Asset Management Co. sold The Asset — Samsung Fire & Marine Insurance Co.'s headquarters in the GBD — to Samsung SRA Asset Management Co. for 1.1 trillion won.

The 2024 tally compares with 7.5 trillion won in 2023 and marked the first increase since 2020's 13.99 trillion won at the height of the COVID-19 pandemic.

It also represented the second largest office sales volume in Seoul in one year since the research house began compiling relevant data in 2000.

“Over the past two to three years, investors targeted core assets in key business districts because of high borrowing rates and the difficulty of raising equity funds,” said a GenstarMate official. 

“Assets in other districts such as Sangam and Yeongdeungpo were relatively overlooked.”

Office buildings that changed hands in the GBD in 2024 included the Arc Place (791.7 billion won) and KOREIT Tower (480 billion won).

In the CBD, Donuimun D Tower (895.3 billion won), the Hanwha Building (808.0 billion won) and City Square (428.1 billion won) found new owners.

The GBD and the CBD accounted for 5.8 trillion won and 4.9 trillion won of 2024's office building sales, respectively.

The GenstarMate official forecast a shortage of new supply in major business districts over the next couple of years to prop up the Seoul office market.

The National Pension Service's investment in Korean real estate may add support. In 2025, the world's No. 3 pension scheme plans to pour 2 trillion won into the domestic real estate market.

But slower-than-expected interest rate cuts could constrain fundraising, coupled with the political uncertainty in the aftermath of President Yoon Suk Yeol’s impeachment and Donald Trump’s second term in the White House.

The political instability has already dealt a blow to the domestic office market. In December, Singapore’s GIC dropped the sale of the Seoul Financial Center after its bidders lowered the valuation of the landmark building following Yoon’s ill-fated martial law attempt.

Pebblestone Asset Management recently withdrew the sale of Pacific Tower, a 23-story office building in the CBD.

Meanwhile, Blackstone bought the Gangnam office tower of K-pop pioneer SM Group for 120 billion won in 2024 to renovate into a hotel, after selling Arc Place for 791.7 billion won. 

Write to Byung-Hwa Yoo at hwahwa@hankyung.com
Yeonhee Kim edited this article.