Seoul Prime Office Q3/2026

Recent interest rate hikes and the rise in the 5-year Korean government bond yield have intensified upward pressure on cap. rates, with further increases likely going forward.

Resilient Leasing, Cautious Investment

Key Takeaways

In the CBD, two new prime office assets (204,000 sq m) were delivered, raising the district’s vacancy rate by 1.3 ppt QoQ to 7.3%. In contrast, the GBD and YBD continued to maintain tight vacancy rates below 4%.
Face rents in the Seoul prime office market rose by 5.5% YoY, although rent-free periods appear to have become more prevalent in buildings with available space.
Seoul office transaction volume totalled approximately KRW6.2 trillion in Q3/2026, with investors remaining selective focusing on assets offering stable cash flows, value-add opportunities, and attractive pricing.
Following two recent base rate hikes and elevated financing cost, Seoul prime office cap. rates on an effective rent basis are estimated to have edged up to the low-to-mid 4% range in Q3/2026.