CBD drives growth in overall net absorption

• Quarterly net take-up reached 7,502 pyeong, mostly driven by CBD move-ins, including NH’s occupation of NH NongHyup Tower. Meanwhile, Yeouido and Gangnam posted negative figures due to tenant departures, recording -2,790 and -1,467 pyeong, respectively.
• Hanwha Ocean, previously located in Grand Central, signed a lease for seven floors at Daishin Finance Center. Part of the vacated space at Grand Central was leased by Encar.com Co., which relocated from AIA Tower, maintaining its presence within the CBD.

Marginal decline in overall vacancy rate driven by CBD decrease

• No new office buildings were added to the basket in Q1 2026.
• Seoul’s vacancy dropped 39 bps q-o-q to 4.3%. The CBD was the only submarket to see improved vacancy, down 159 bps q-o-q to 6.9%, backed by scheduled move-ins at several buildings, including NH Nonghyup Tower. Yeouido and Gangnam both saw marginal q-o-q increases.

Grade A office market cap rate 4.1% in Q1 2026

• Seoul’s net effective rent was KRW 149,516 per pyeong, up 1.1% q-o-q and 4.5% y-o-y. The CBD saw the largest uptick of 1.9% q-o-q, while Yeouido’s effective rent dropped 0.9% q-o-q.
• In Q1, total office volume was KRW 3.4 trillion. The most notable transaction was Seoul Square in the CBD. Korea Investment Real Asset Management acquired it from ARA Korea Asset Management for approximately KRW 1.3 trillion through a share deal arrangement.

Outlook: CBD supply pipeline expected to exert upward pressure on the overall vacancy rate

• While Yeouido and Gangnam are expected to maintain steady occupancy backed by limited new supply, the CBD market is projected to face a higher vacancy rate and slower rental growth as new supply comes online starting this year.
• As domestic institutions such as NPS, Korea Post and Yellow Umbrella Mutual Aid provide liquidity in the market, investment is expected to gain momentum. Thus, oversupply concerns in the CBD will likely gravitate investor appetite towards Yeouido and Gangnam.