Leasing activity for office buildings in Seoul is expected to remain conservative in 2016, according to the 2016 Asia Pacific outlook report by real estate market research company Cushman & Wakefield.

The majority of tenant movements for large office buildings will emanate from companies’ restructuring, consolidating, or office mergers, rather than expansion. 


A case in point is Samsung Group, which has begun consolidating the offices of its affiliates in multiple locations.

“Amid the sluggish economic landscape, the overall vacancy rate of office buildings in Seoul will continue to rise due to lackluster expansion activity coupled with a number of large-scale owner-occupied building developments,” said Ryan Lee from Cushman & Wakefield Korea.

The perpetuation of elevated vacancy rates, combined with the lack of any growth catalyst and relatively high office prices, is likely to weigh on investment activity across the region.

Nonetheless, Seoul will remain a magnet for foreign investment, especially with continuing attractive yield spreads, the consultancy added.

(seoyounglee@heraldcorp.com)