Understanding Net Absorption in Seoul’s Office Market
In the third quarter of 2025, Seoul’s prime office market experienced a total net absorption of -18,600 square meters. This negative absorption was observed across key submarkets, with the Central Business District (CBD) recording a significant negative absorption of -26,300 square meters and the Yongsan Business District (YBD) at -5,000 square meters. In contrast, the Gangnam Business District (GBD) was the only area to show positive absorption, with 12,800 square meters of space occupied.
This shift in net absorption had a direct impact on vacancy rates across these districts. The CBD saw its vacancy rate increase by 0.9 percentage points quarter-over-quarter to reach 5.0%. After years of steady decline since 2015, the vacancy rate had hit a low of 1.7% in the first quarter of 2024. However, this trend has reversed, with the rate beginning to climb again.
Key Relocations and Their Impact
Several major companies have been involved in relocations that have influenced the dynamics of the office market. For instance, DL Group affiliates are reportedly considering moving to the Daelim Building, which had been temporarily occupied by the Jongno-gu Office. Following the expiration of its lease, the Jongno-gu Office has started relocating to The K Twin Tower, with three floors (5,200 square meters) already moved by the end of September.
Eli Lilly Korea, a pharmaceutical company, recently relocated from the LG Seoul Station Building to the newly refurbished Seoul City Tower. This move helped absorb a portion of the large vacant space, which amounted to 3,900 square meters.
Meanwhile, SK Group is consolidating its office spaces across multiple locations to improve synergy among its affiliates and reduce operational costs. As part of this strategy, SK Innovation (7,200 square meters), SK Materials, SK E&S, and others vacated Gran Seoul, while SKC (10,700 square meters), SK Nexilis (1,600 square meters), and SK PIC Global (432 square meters) moved out of The K Twin Towers. These relocations resulted in vacancies, contributing to the recent rise in the CBD vacancy rate.
GBD Maintains Strong Performance
The GBD maintained a strong performance, with its vacancy rate declining by 0.6 percentage points quarter-over-quarter to 1.7%, continuing to stay below 3% since the first quarter of 2022. This stability was driven by the end of remote work and an increase in employees. Hyundai AutoEver, headquartered in Luchen Tower, expanded at Samsung-dong Office Building, taking five floors (8,400 square meters) vacated by iMarket Korea. Bithumb also relocated to its newly acquired Bithumb Finance Tower (formerly Gangnam N Tower), occupying four floors (6,300 square meters). These moves helped lower the GBD vacancy rate to the 1% range.
YBD Faces Rising Vacancy Rates
In contrast, the YBD saw its vacancy rate rise by 0.3 percentage points quarter-over-quarter to 4.6%. GR Korea (1,400 square meters) relocated from WeWork at O2 Tower to One Centinel, while KIS Pricing (2,400 square meters) also moved to One Centinel due to the redevelopment of the KFPA Building. Additionally, several financial firms occupying smaller spaces moved out to other districts, contributing to the rise in the YBD vacancy rate.
Trends in Office Space Occupancy
This quarter, 40% of occupied space was driven by lateral relocations (Prime-to-Prime), with approximately 89% occurring within the same district, resulting in minimal impact on overall vacancy rates. Upgrade relocations (Secondary-to-Prime) accounted for 33%, largely due to the moves by Jongno-gu Office and Bithumb. Meanwhile, expansion and new organization accounted for 21% and 6%, respectively.