The winter in the commercial real estate market was particularly harsh. With soaring interest rates, office transaction volumes plummeted, and the crisis in real estate project financing (PF) left construction companies and real estate-related institutional investors reeling. Last year, market transactions were halved. From January to November 2023, the transaction value of office and commercial buildings in Seoul amounted to 11.6856 trillion KRW, a decrease of 51.7% compared to the same period in the previous year (22.5987 trillion KRW).
Despite enduring the frozen market, RSQUARE, the leading proptech company, surpassed an annual transaction volume of 2 trillion KRW last year and a cumulative transaction volume of 9 trillion KRW since its inception. The total area of real estate contracted by RSQUARE last year reached 628,000 square meters, 1.6 times the size of Jamsil Sports Complex (402,816 square meters). In the first half of this year, RSQUARE plans to launch "RSQUARE Analytics," Asia's first commercial real estate solution, and monetize the data collected through comprehensive surveys.
CEO Lee Yong-kyun stated, "Even for us, who have recorded high growth every year, the market downturn hit us hard starting in the fourth quarter of 2022." He added, "Especially in the trading market, we faced a 'double whammy' of a severe economic downturn and a shortage of vacancies."
RSQUARE CEO, Lee Yong-kyun
In 2023, the real estate market was heavily contracted due to the tightening measures. On the other hand, the secondary battery boom swept through the automotive and materials industries. CEO Lee cited the shortage of corporate office vacancies as due to the reduced demand coupled with inadequate supply. He explained, "Even though demand decreased, the supply could not keep up, so the impact on the rental market was minimal. Startups, which mainly use shared offices as their workspace, particularly struggled, contributing to the shortage of vacancies." He also noted that "companies in the automotive, gaming, and materials industries continued their activities, resulting in a significant demand for alternative office spaces in the Gangnam area."
Nevertheless, CEO Lee assessed that RSQUARE weathered the rapidly changing market conditions well. RSQUARE's annual connected revenue last year was 2 trillion KRW, with cumulative transactions exceeding 9 trillion KRW. He credited the growth in a challenging market to new business portfolios that had been seeded earlier. He highlighted the logistics center brokerage business, stating, "We focused on increasing our penetration in the logistics market, which was in its early stages. Our revenue in this area grew by over 600%." He added, "While a booming market would have been better, it was actually an opportunity for healthy growth and not a bad environment for a latecomer like us to penetrate."
RSQUARE is diversifying its business portfolio and launching new services, achieving notable results. According to industry reports, RSQUARE's asset management (PM), logistics, and construction businesses, which were prepared starting in 2021, have seen rapid growth. In 2023, total order revenue increased by approximately 3.6% compared to the previous year. The number of orders also increased by over 240, totaling 1,285 cases. Asset management (PM) and logistics center leasing orders increased by 922% and 666%, respectively, compared to the previous year, a remarkable achievement despite market instability due to excess supply of logistics centers and the real estate PF crisis. In the case of acquisition and sale advisory services, last year's revenue increased by 201% compared to 2022.
CEO Lee attributed RSQUARE's resilience in the face of challenging market conditions to "data." The big data consulting team, based on RSQUARE's comprehensive survey data, saw its order revenue increase by nearly 60% compared to the previous year. He remarked, "In the commercial real estate market, institutional investors see RSQUARE's transparent information as a significant advantage," adding, "When the market becomes saturated, interest inevitably shifts to small and medium-sized assets, and detailed data is needed to buy and sell these assets."
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The winter in the commercial real estate market was particularly harsh. With soaring interest rates, office transaction volumes plummeted, and the crisis in real estate project financing (PF) left construction companies and real estate-related institutional investors reeling. Last year, market transactions were halved. From January to November 2023, the transaction value of office and commercial buildings in Seoul amounted to 11.6856 trillion KRW, a decrease of 51.7% compared to the same period in the previous year (22.5987 trillion KRW).
Despite enduring the frozen market, RSQUARE, the leading proptech company, surpassed an annual transaction volume of 2 trillion KRW last year and a cumulative transaction volume of 9 trillion KRW since its inception. The total area of real estate contracted by RSQUARE last year reached 628,000 square meters, 1.6 times the size of Jamsil Sports Complex (402,816 square meters). In the first half of this year, RSQUARE plans to launch "RSQUARE Analytics," Asia's first commercial real estate solution, and monetize the data collected through comprehensive surveys.
CEO Lee Yong-kyun stated, "Even for us, who have recorded high growth every year, the market downturn hit us hard starting in the fourth quarter of 2022." He added, "Especially in the trading market, we faced a 'double whammy' of a severe economic downturn and a shortage of vacancies."
RSQUARE CEO, Lee Yong-kyun
In 2023, the real estate market was heavily contracted due to the tightening measures. On the other hand, the secondary battery boom swept through the automotive and materials industries. CEO Lee cited the shortage of corporate office vacancies as due to the reduced demand coupled with inadequate supply. He explained, "Even though demand decreased, the supply could not keep up, so the impact on the rental market was minimal. Startups, which mainly use shared offices as their workspace, particularly struggled, contributing to the shortage of vacancies." He also noted that "companies in the automotive, gaming, and materials industries continued their activities, resulting in a significant demand for alternative office spaces in the Gangnam area."
Nevertheless, CEO Lee assessed that RSQUARE weathered the rapidly changing market conditions well. RSQUARE's annual connected revenue last year was 2 trillion KRW, with cumulative transactions exceeding 9 trillion KRW. He credited the growth in a challenging market to new business portfolios that had been seeded earlier. He highlighted the logistics center brokerage business, stating, "We focused on increasing our penetration in the logistics market, which was in its early stages. Our revenue in this area grew by over 600%." He added, "While a booming market would have been better, it was actually an opportunity for healthy growth and not a bad environment for a latecomer like us to penetrate."
RSQUARE is diversifying its business portfolio and launching new services, achieving notable results. According to industry reports, RSQUARE's asset management (PM), logistics, and construction businesses, which were prepared starting in 2021, have seen rapid growth. In 2023, total order revenue increased by approximately 3.6% compared to the previous year. The number of orders also increased by over 240, totaling 1,285 cases. Asset management (PM) and logistics center leasing orders increased by 922% and 666%, respectively, compared to the previous year, a remarkable achievement despite market instability due to excess supply of logistics centers and the real estate PF crisis. In the case of acquisition and sale advisory services, last year's revenue increased by 201% compared to 2022.
CEO Lee attributed RSQUARE's resilience in the face of challenging market conditions to "data." The big data consulting team, based on RSQUARE's comprehensive survey data, saw its order revenue increase by nearly 60% compared to the previous year. He remarked, "In the commercial real estate market, institutional investors see RSQUARE's transparent information as a significant advantage," adding, "When the market becomes saturated, interest inevitably shifts to small and medium-sized assets, and detailed data is needed to buy and sell these assets."