[NewsSpace=Jack Moon] Once hailed as a paradise for IT and gaming companies, Pangyo Techno Valley is undergoing a transformation.

Much like a natural ecosystem evolves over time, the business landscape of Pangyo is in a constant state of evolution. Recent analysis from RSQUARE has clarified the reasons behind this change.

According to RA (RSQUARE Analytics), office rental prices in Pangyo Techno Valley rose by 5.3% in the second quarter of 2024 compared to the same period last year, surpassing the 4.1% increase seen in Seoul’s Gangnam area. This reflects the sustained demand in Pangyo, albeit with a notable shift in its sources.

An interesting phenomenon of “habitat migration” has been observed recently in Pangyo. The departure of gaming company Smilegate has made way for Hanwha Precision Machinery, a strong player in manufacturing. RSQUARE mediated the transition between these two companies in the ecosystem.

This shift is not merely coincidental. An analysis of leasing transaction data from RA reveals that the proportion of manufacturing firms among new tenants in Pangyo rose from 18% to 27% in the first half of 2024. Major manufacturers such as Hyundai Steel, HD Hyundai, and Hyundai Motor are relocating their operations to Pangyo.

Citing JLL's analysis, the share of the information and communication sector in Pangyo's central commercial area fell from 91.1% to 85.7%. This shift resembles a dense forest losing a single tree species while allowing a variety of others to take root, strengthening the ecosystem.

In 2024, three out of five large office transactions over 10,000 square meters in Pangyo were conducted by manufacturing firms. This indicates that manufacturers are choosing Pangyo's fertile ground to integrate advanced technologies like AI.

However, these changes are not confined to Pangyo alone. According to RA's data on R&D center relocations, more than ten large corporations have moved their R&D centers near Seoul from 2023 to the first half of 2024, including notable names like GS Engineering & Construction, Hyundai Motor, and Camtronics.

The movement of these companies is sparking change in the commercial real estate market. RSQUARE's brokerage data reveals that 40% of office transactions in Pangyo during the first half of 2024 involved sector shifts, a substantial increase from 25% in the same period the previous year.

The commercial real estate market in the metropolitan area centered around Pangyo is in the midst of a dynamic phase of change. We may be witnessing the birth of a new business ecosystem through data analysis.