Report
2023 Korea Real Estate Market Outlook
February 6, 2023
CBRE Korea ‘Real Estate Market Outlook 2023’ casts a look back at Korea’s office, retail, logistics, investment market in 2022 and provides an outlook of the 2023 commercial real estate market and beyond. Followings are the report summary of each market and please click ‘Download Report’ to see the full report.
Looking for a PDF of this content?
Economy
Korea’s GDP grew by around 2.6% in 2022. Amid growing global economic uncertainty, CBRE predicts that the Korean economy will grow at about 1.1%, continuing its low-growth trend from the end of last year.
Office
In 2023, one new building is scheduled to come on stream in GBD and YBD, respectively, with total new stock projected to reach less than half of the average annual supply over the past five years. While competition to lease Grade A office space in Seoul is expected to remain intense in 2023, effective rents in Seoul are forecasted to rise by more than 5% over the coming year.
Retail
Korea’s retail market enjoyed a positive H1 2022, but the effects of high inflation and a sharp rise in key interest rates began to materialize in H2, resulting in a sharp contraction in consumption. While the slow recovery of domestic demand is expected to continue in 2023, sentiment should improve in H2 along with the easing of interest rates once inflation peaks.
Logistics
This year will see the addition of an unprecedented volume of new supply, with just over 6 million sq. m. of new logistics stock due to come on stream in Greater Seoul, double the volume of last year’s supply. While many retail companies are implementing various growth strategies, leasing activity is expected to differ depending on the volume of goods required, which will be based on sales performance.
Investment
Seoul’s commercial real estate market is expected to see a decrease in transaction volume and a rise in yields across all sectors in 2023 due to risks associated with high interest rates and the rising cost of finance. CBRE expects to observe a turn toward recovery as interest rate hikes ease in the second half of the year.
Korea’s GDP grew by around 2.6% in 2022. Amid growing global economic uncertainty, CBRE predicts that the Korean economy will grow at about 1.1%, continuing its low-growth trend from the end of last year.
Office
In 2023, one new building is scheduled to come on stream in GBD and YBD, respectively, with total new stock projected to reach less than half of the average annual supply over the past five years. While competition to lease Grade A office space in Seoul is expected to remain intense in 2023, effective rents in Seoul are forecasted to rise by more than 5% over the coming year.
Retail
Korea’s retail market enjoyed a positive H1 2022, but the effects of high inflation and a sharp rise in key interest rates began to materialize in H2, resulting in a sharp contraction in consumption. While the slow recovery of domestic demand is expected to continue in 2023, sentiment should improve in H2 along with the easing of interest rates once inflation peaks.
Logistics
This year will see the addition of an unprecedented volume of new supply, with just over 6 million sq. m. of new logistics stock due to come on stream in Greater Seoul, double the volume of last year’s supply. While many retail companies are implementing various growth strategies, leasing activity is expected to differ depending on the volume of goods required, which will be based on sales performance.
Investment
Seoul’s commercial real estate market is expected to see a decrease in transaction volume and a rise in yields across all sectors in 2023 due to risks associated with high interest rates and the rising cost of finance. CBRE expects to observe a turn toward recovery as interest rate hikes ease in the second half of the year.