Last year, the size of domestic commercial real estate transactions hit an all-time high on the back of expanding large office deals. This year, the transaction volume may see some adjustment, but a forecast emerged that the market will enter a structural reorganization phase in the medium to long term, with supply expansion and demand realignment occurring simultaneously.
Global full-service real estate corporations CBRE Korea said in a report, "2026 outlook for Korea's commercial real estate market," published on the 22nd, that last year's domestic commercial real estate transaction volume was tallied at about 3.38 trillion won, up 48.5% from a year earlier, marking a record high.
CBRE Korea explained, "Expectations for future rate cuts had a greater impact on decision-making than concerns about the level of interest rates, resulting in a concentration of previously delayed large-scale asset disposals, forward purchases, and transactions centered on strategic investors (SI)."
By asset type, offices accounted for the largest share at 2.468 trillion won. Logistics came to 530 billion won, retail 197 billion won, and hotels 184 billion won. In particular, office transactions of 100 billion won or more and logistics asset transactions of 10 billion won or more drove the overall market expansion. Office and logistics transactions accounted for about 89% of all commercial real estate transactions.
CBRE Korea projected that this year's transaction volume could decrease by around 10%–15% from a year earlier due to base effects and uncertainty over the timing of rate cuts. However, it noted that SI demand for securing headquarters buildings and the flow of investment into alternative assets will support the market, keeping overall investor sentiment solid.
In the Seoul office market, starting this year, new supply centered on CBD Grade A assets will materialize, and tenant relocation and expansion demand is expected to recover gradually. New supply this year is around 240,000 square meters, and including additional projects with project financing (PF) conversions to be completed by 2029, a total of 1.49 million square meters of supply is scheduled.
Despite the increase in supply, the office vacancy rate is expected to remain stable at below 5%. This is because user-based demand centered on prime assets remains solid, and about 70% of domestic office users maintain a five-day-a-week office attendance system, far exceeding the Asia-Pacific average of 28%. Upward pressure on rents from higher development costs is persisting, and there are moves to adjust lease terms, such as shortening rent-free periods.
Despite weak domestic consumption, the retail market is showing a recovery centered on key commercial districts, driven by an increase in foreign tourists and the spread of medical and experiential consumption. Traditional districts such as Myeong-dong and Gangnam are seeing lower vacancy rates and a rebound in rents, while emerging districts such as Seongsu and Yongsan appear to have entered a gentle adjustment phase after rapid growth.
In the Seoul metropolitan area's Grade A logistics market, concerns about oversupply are easing as new supply declines, bringing demand and supply back into balance. New supply this year will shrink to about 860,000 square meters, and the average vacancy rate is expected to stabilize in the low 10% range. In particular, prime ambient-temperature logistics assets are seeing vacancy rates fall to single digits, highlighting their scarcity.
CBRE Korea cited data centers as strategic assets influenced by government policy finance support and regional development policies, and projected that their status as a mid- to long-term investment asset class will strengthen further.
Choi Su-hye, executive director and head of research at CBRE Korea, said, "2026 will be a turning point that goes beyond a simple adjustment phase, with supply expansion, demand realignment, and diversification of investment strategies unfolding simultaneously," adding, "For tenants, the range of choices will widen, and for investors, a strategic approach centered on vetted assets will become even more important."