Overall net take-up remains positive, continuing the trend observed in the previous quarter

• CBD and Gangnam recorded positive net take-up of approximately 5,800 pyeong and 500 pyeong, respectively, supported by scheduled move-ins. Yeouido was the only submarket with negative net take-up of -1,600 pyeong due to anchor tenant departures at FKI Tower and Parc 1 Tower 1.
• The largest leasing deal was Lotte Rental signing a relocation deal for five floors at CBD’s NH NongHyup Tower, taking over the space that remained vacant after DL E&C’s departure. In Gangnam, Sanofi-Aventis Korea signed a lease for one floor at Center Field West.

New supplies in the CBD drive vacancy rate upward

• Two Grade A office buildings were completed in Q2 2026, G1 Seoul (GFA of approximately 37,060 pyeong) and Rene Square (GFA of approximately 15,361 pyeong), both located in the CBD.
• Seoul’s vacancy rate increased 230bps q-o-q to 6.6%, as the CBD’s vacancy rate surged 542bps q-o-q to 12.3% with the two new completions added to stock at 100% physical vacancy. Yeouido rose 29bps q-o-q to 4.8%, while Gangnam dropped 7bps q-o-q to 0.9%.

Yeouido sees its largest office transaction in almost five years

• Net effective rent in Seoul overall was KRW 152,800 per pyeong, up 2.2% q-o-q and 4.9% y-o-y. The CBD saw the largest uptick of 2.8% q-o-q due to the relatively high net effective rents of the newly supplied buildings. Gangnam rose 2.6% q-o-q, while Yeouido was flat.
• Total office deal volume reached KRW 4.0 trillion in Q2 2026. The most notable transaction was the Hana Financial Investment Building in Yeouido, which Hana Alternative Asset Management acquired from Koramco The One REIT for KRW 811.2 billion.

Outlook: Polarisation among submarkets is expected due to concentrated new supply in the CBD

• Unlike Yeouido and Gangnam, which are anticipated to maintain stable occupancy and effective rental growth due to limited new supply, the CBD is expected to see double-digit vacancy rates and declining effective rent levels due to its substantial new supply pipeline.
• While domestic institutions, including GEPS and Korea Post are providing dry powder to the market, investors are likely to be more selective in acquisitions due to oversupply concerns in the CBD and rising financing costs amid BOK raising the base rate to 2.75% in July.