[NewsSpace=Jack Moon] Seoul’s office vacancy rate has been rising for four consecutive quarters, driven largely by the significant supply of large-scale assets in the Magok Business District.

According to the Q4 2024 Office Market Report published by R.A. (RSQUARE Analytics), a division of RSQUARE (CEO Yongkyun Lee), a leading commercial real estate services firm, the average office vacancy rate in Seoul for Q4 stood at 4.9%. This represents a 2.0%p increase from the previous quarter, continuing an upward trend for four consecutive quarters.

By asset class, the increase in vacancies among prime-grade offices (gross floor area over 20,000 py) was the primary driver of the overall vacancy rate rise.

In Q4, the prime-grade office vacancy rate reached 8.0%, reflecting a sharp 6.8%p increase from the previous quarter. This surge was primarily due to the new supply of approximately 232,000py of office space in the Magok Business District.

Rental growth has also slowed. While the quarterly average rental growth rate for Seoul offices was 1.5% from 2022 to 2023, it declined to 1.2% in 2024.

In Q4 2024, the nominal rent for Seoul office space was KRW 97,000/py, reflecting a modest 0.3% increase from the previous quarter. Notably, prime-grade offices, which exhibited higher vacancy rates, recorded a nominal rent of KRW 122,000/py, marking a 0.8% decline.