Last year, Korea's commercial real estate market logged a record investment volume, buoyed by a recovery in investor sentiment from falling interest rates and the resumption of large transactions.
According to the "Seoul commercial real estate market report for Q4 2025" released by CBRE Korea on the 3rd, last year's annual investment volume in Seoul commercial real estate totaled 33.7 trillion won. As borrowing conditions improved with lower interest rates, large-scale transactions that had been delayed began in earnest, and structural changes in the nature of transactions also emerged, such as purchases for owner-occupation and a clear preference for prime assets.
As the downtrend in interest rates persisted throughout last year, the negative spread between borrowing costs and asset yields (cap rate) was largely resolved, and investor sentiment, which had remained on the sidelines, was assessed to have gradually recovered. This trend continued in the fourth quarter. In Q4 last year, investment in Seoul commercial real estate reached 8.8807 trillion won, up 68.6% from a year earlier. Transactions were led by office and logistics assets.
Office transactions in particular led the market. Fourth-quarter office transaction volume was 5.5921 trillion won, accounting for 63% of total commercial real estate transactions for the quarter. Participation by strategic investors (SI) stood out, with a string of corporation-led headquarters acquisitions such as LX Group's LG Gwanghwamun Building and MoneyToday's Premier Place.
The Seoul Grade A office market showed signs of supply-demand normalization. The average vacancy rate for Grade A offices in Q4 was 3.3%, up 0.2 percentage points from the previous quarter. After a prolonged low-vacancy phase of 1–2% from 2022 to 2024, the market is analyzed to be moving into a stage of supply-demand rebalancing. Over the same period, nominal rents continued to rise to 40,768 won/㎡, up 2.0% from the previous quarter, and effective rents were 38,304 won/㎡, up 6.3% from a year earlier.
In the logistics market, changes in the supply structure were notable. New supply in the Seoul metropolitan Grade A logistics market in Q4 was 278,361㎡, bringing the annual cumulative supply to about 1.04 million㎡. Logistics investment volume rose about 70% from the previous quarter to 2.1627 trillion won, with domestic and foreign capital concentrating on high-quality assets such as the Cheongna Logistics Center.
In the retail market, inbound tourism demand was seen to underpin the sector even as the domestic recovery remained limited. In particular, Myeong-dong is being reshaped into a "beauty and medical specialty" district based on a cluster of large pharmacies and beauty brands, while core districts such as Seongsu and Hannam also saw steady leasing demand alongside continued rent increases.
Choi Su-hye, executive director heading research at CBRE Korea, said, "Last year, in a lower interest rate environment, transactions that had been delayed resumed, and investment activity expanded significantly around office and logistics assets," and added, "As corporations increasingly make strategic purchases and selectively invest in prime assets, we are observing a shift in the nature of transactions and in asset preferences."