Increased vacancy in selected districts has been driven largely by major corporate relocations and portfolio restructuring.
Occupiers continue to prioritize quality, efficiency and long-term workplace strategy, with leasing demand concentrated in prime assets. As a result, overall market fundamentals remain stable heading into 2026, although near-term vacancy pressure may persist in certain submarkets.
In 1Q26, the Seoul office leasing market remained broadly stable despite increased tenant relocations driven by large‑scale redevelopment and major refurbishment projects. Vacancy movements were primarily the result of redevelopment‑ and refurbishment‑led relocations rather than any weakening in underlying demand. Vacancy in the CBD remained stable at approximately 5.5%, while the GBD continued to record a low vacancy rate of around 2.2% under tight supply conditions. In contrast, vacancy in the YBD increased to approximately 3.1%, mainly due to large‑scale vacancy at Parc1 Tower 1.
Leasing demand during the quarter was increasingly shaped by structural shifts across industries rather than pure expansion. K‑beauty and fashion companies continued to consolidate operations into prime office assets, while gaming and content companies increased pre‑leasing activity in newly developed buildings. At the same time, AI and global technology firms are emerging as a new source of demand, reinforcing tenant preference for prime assets and widening the performance gap between prime and non‑prime buildings across submarkets.
Key Takeaways
- In 1Q26, tenant relocation driven by redevelopment and refurbishment was the key market driver
- Vacancy movements reflected redevelopment‑led reallocation rather than demand weakening
- The CBD experienced short‑term vacancy increases but remained stable overall
- The GBD maintained stable demand under tight supply conditions
- The YBD saw an event‑driven vacancy increase due to Parc1 Tower 1
- K‑beauty and consumer companies are driving demand through portfolio consolidation
- Gaming and content companies are increasing pre‑leasing activity
- AI and global technology firms are emerging as a new source of demand
