CBRE Korea: Average Vacancy Rate for Seoul Grade A Offices Falls to 3.1% in Q3, Reversing Previous Quarter’s Rise; Resilient Occupier Demand Continues for Prime Properties in Gangnam and Yeouido

- CBD vacancy declines to 5.1%, while Gangnam and Yeouido remain in the 1% range; relocations to prime properties observed among K-cosmetics companies
- Q3 commercial real estate investment volume totals KRW 9.6 trillion, with strategic investors emerging as major office buyers

October 21, 2026 (Seoul) – CBRE Korea, the world's largest commercial real estate services company, announced in its Seoul Figures Q3 2026 report that the average vacancy rate for Grade A offices across Seoul’s three major business districts fell by 1.1 percentage points quarter-on-quarter to 3.1%. Vacancy rates stood at 5.1% in the Central Business District (CBD), 1.0% in the Gangnam Business District (GBD) and 1.7% in the Yeouido Business District (YBD). Resilient occupier demand continued, particularly for prime properties in the GBD and YBD.

The decline followed an increase in vacancy in the previous quarter due to substantial new supply in the CBD. A major single-tenant lease in the CBD, together with demand for prime properties in the GBD and YBD, drove the improvement. In the CBD, the Serious Crimes Investigation Agency’s lease of the entire René Square building led the decline in vacancy, with this single transaction accounting for approximately 82% of the district’s total leasing volume in Q3. The GBD recorded the strongest leasing activity among the three districts, with IT companies accounting for 67% of its leasing volume. Relocations from Grade B properties to prime properties were observed among K-cosmetics companies. Absolve Lab, the company behind skincare brand Celimax, reportedly signed a lease at Centerfield. In the YBD, demand from financial-sector occupiers was particularly notable at prime properties, including Parc1 Tower 1 and FKI Tower, while relocation demand from luxury brand headquarters was also observed.

New leasing volume in Seoul’s Grade A office market totaled 117,521 sq. m. in Q3, remaining in line with the quarterly average since 2025. Full-year leasing volume is expected to increase slightly from last year as occupiers consider relocations prompted by redevelopment and continue to favor prime properties. However, average face rent increased just 0.4% quarter-on-quarter to KRW 41,671 per sq. m. per month, marking the slowest quarterly growth since Q2 2021. Cumulative net effective rental growth for the first three quarters was approximately 2.5%, below the full-year increase of 6.2% recorded in 2025.

The retail market continued to grow, particularly across department stores and major commercial districts, supported by growth in international tourism and consumer spending. Cumulative international visitor arrivals reached 15.05 million through August, up 22% year-on-year, while international visitor card spending over the same period increased 49% to KRW 14 trillion. In Seongsu, the vacancy rate fell by 2.1 percentage points quarter-on-quarter to 1.3%, the lowest level among major commercial districts, while rents increased 13% year-on-year. As a result, demand from brands for new store openings is spreading toward Seoul Forest and the Konkuk University area. Global brands continued to open large-format stores, with JanSport launching its first flagship store worldwide in Seongsu and Decathlon opening its first flagship store in Korea, in Gangnam. Premium pharmacies, which have emerged as a new distribution channel for K-beauty products, also expanded from Myeongdong into the Gangnam Station area.

In the market for Grade A logistics facilities in the Seoul Metropolitan Area, approximately 90% of the year’s scheduled new supply had been delivered by the end of Q3, bringing annual supply close to completion. Third-party logistics (3PL) and e-commerce companies accounted for approximately 71% of new leasing volume in Q3, with demand continuing across major logistics hubs, including Incheon, Anseong and Icheon. The occupier base is gradually diversifying as K-beauty companies, including APR, lease large spaces to support logistics automation and business expansion. With limited new supply scheduled for Q4 and large blocks of available dry-storage space being absorbed, the vacancy rate for Grade A logistics facilities in the Seoul Metropolitan Area is expected to continue declining.

Commercial real estate investment volume in Seoul totaled KRW 9.6 trillion in Q3, up approximately 5% quarter-on-quarter and down approximately 4% year-on-year. Cumulative investment volume for the first three quarters reached approximately KRW 25 trillion, broadly matching the record level achieved during the same period in 2025. Office transaction volume exceeded KRW 7 trillion, accounting for 73% of total investment volume, supported by major transactions involving G1 Seoul, Pine Avenue Building A and Gangnam 358 Tower. Among mid- to large-scale transactions valued at KRW 100 billion or more, strategic investors accounted for approximately 30%, emerging alongside institutional investors as major buyers.

Logistics transaction volume totaled approximately KRW 1 trillion, remaining in the 70% range of the quarterly average recorded in 2025. Nevertheless, domestic institutional investors continued to acquire logistics assets for a third consecutive quarter, including Samsung SRA Asset Management’s acquisition of Pyeongtaek Logistics Park. Average cap rates for Seoul Grade A offices and Grade A logistics assets in the Seoul Metropolitan Area stood at 4.3% and 5.4%, respectively, both turning upward.

Claire Choi, Senior Director, Head of Research at CBRE Korea, said, “This quarter confirmed the resilience of occupier demand in Seoul’s office market, as the absorption of newly supplied space in the CBD progressed and leasing activity continued at prime properties in Gangnam and Yeouido.” She added, “However, two base-rate increases and higher funding costs are delaying some transactions and adding to upward pressure on cap rates. With fewer transactions scheduled to close in Q4 than a year earlier, full-year investment volume is expected to fall below the 2025 level. Market differentiation is also likely to become more pronounced, with greater emphasis on individual asset fundamentals, including location and tenancy stability.”