As Seoul's commercial real estate market entered a correction phase due to changes in the interest-rate environment and base effects, selective transactions centered on prime assets such as offices and logistics continued, wrapping up the first quarter relatively stably. However, new leasing was generally cautious, making the temperature gap within the market more pronounced.
According to the "Seoul commercial real estate market report for the first quarter of 2026" released by CBRE Korea on the 29th, the investment market continued selective transactions focused on core assets despite the corrective trend. First-quarter investment volume was 6.2536 trillion won, down 17% from a year earlier, but offices accounted for about 66% of that, leading the market.
In the leasing market, trends diverged by asset type. In the office market, the absence of new supply in the first quarter allowed vacancies to continue to clear, maintaining stable supply-demand conditions. The vacancy rate for grade-A offices in Seoul's major business districts was 2.8%, down 0.5 percentage points from the previous quarter, and net absorption also increased. However, the scale of new leases decreased. This is analyzed as reflecting tenants' wait-and-see stance ahead of large-scale supply in the downtown area in the second quarter.
By district, the Yeouido area saw the largest drop in vacancy, while the Gangnam area maintained a low vacancy rate. In contrast, in the downtown area, the pace of lease signings following new supply is cited as a variable that will determine the market's direction. Rents continued a gentle rise.
The retail market continued to recover. With the increase in foreign tourists and greater spending power due to the weaker won overlapping, both rent increases and vacancy declines appeared, centered on core commercial districts. In major districts such as Seongsu and Gangnam, rents rose by near double digits, continuing the uptrend, and vacancies were quickly filled in key areas including Myeong-dong. In some areas, brands directly purchased buildings to secure footholds.
The logistics market entered a rebalancing phase due to reduced supply. New supply of logistics centers in the Seoul metropolitan area this year is expected to be at the lowest level in the past 10 years. As a result, tenant demand is concentrating on prime assets. A significant portion of new leases in the first quarter was taken by 3PL and e-commerce corporations, and supported by major retail corporations expanding their hubs, the vacancy rate for ambient logistics fell to single digits.
In the investment market, large office transactions continued, supporting the overall volume. Although logistics investment volume fell sharply from the previous quarter, the stance of selective investment in core assets, centered on institutional investors, was maintained. Hotel assets also saw some transactions, adding to the investment flow.
CBRE Korea assessed that demand responses are clearly diverging depending on asset characteristics and location. It analyzed that in offices, changes in tenant strategies ahead of increased supply, in retail, consumption recovery, and in logistics, preemptive competition due to supply reduction each acted as key variables moving the market. Looking ahead, the investment market will be affected by the direction of interest rates and external uncertainties, but considering transactions in progress, the overall transaction flow is expected to continue.