▶ RSQUARE publishes '2025 Office Leasing Market Trend Report: Industrial Economic Trends and Leasing Market Changes'
▶ Research Center: "Tenant relocation patterns shift amid economic uncertainty"
▶ Strengthening trend toward cost-cutting and efficiency; diverse forms of leasing demand observed
According to the 2025 Leasing Market Trend Report released by the RSQUARE Research Center (Head: Kang-min Ryu), the Seoul office leasing market is facing a structural inflection point as of October.
The report analyzes that financial burdens on corporations have intensified as the economic coincident index turned downward in the second half of 2023. As the economy enters a slowdown phase, demand for relocation to other areas in Seoul (outside the major hubs) to reduce costs is gradually increasing.
Seoul Leasing Market: Upward Trend in Vacancy Rates
The Seoul office market is expected to face upward pressure on vacancy rates over the next few years, with large-scale supply scheduled to begin in earnest after 2027. Currently, the Yeouido Business District (YBD) records a vacancy rate of 2.68%, while large offices in the Gangnam Business District (GBD) maintain a stable flow in the 1% range. However, despite the vacancy rates in core districts remaining at healthy levels below 5%, the general upward trend is expected to persist.
Gradual Tenant Relocation: Moving Beyond Core Districts
In the first half of 2025, the proportion of tenants relocating to "other areas of Seoul" increased, while the share of those moving into the traditional three major districts—CBD (Jongno/Gwanghwamun), GBD (Gangnam), and YBD (Yeouido)—decreased.
There are also distinct differences by industry. While the relocation share to other Seoul areas increased for all sectors except manufacturing compared to 2022-2023, relocation to the CBD and YBD decreased for all except professional, scientific, and technical services. Interestingly, GBD was the only one among the three major districts to see an increase in relocation share across most industries.
Space Consumption: Smaller Spaces, Reduced Footprints
A significant change has been observed in the pattern of space consumption. In the past, it was common for tenants to move into larger spaces (expansion). Recently, however, there has been a rise in cases where tenants move into smaller spaces (downsizing). The proportion of moves from large or medium-sized buildings to smaller buildings has also expanded, suggesting that the "Flight to Quality" trend—relocating to premium buildings—is somewhat weakening.
In short, tenants are prioritizing efficient space utilization and cost reduction over the "symbolism of a large building."
Regional Preferences: Major Districts Down, Other Areas Up
Data shows that all industry sectors now show a growing preference for relocating to other areas of Seoul. Within the four core districts (including Bundang), industries such as finance/insurance, ICT, professional/scientific/technical services, and construction preferred relocating to the GBD. In contrast, the hospitality/restaurant and transport/warehouse sectors leaned toward the CBD. Some preference for relocation to Bundang/Pangyo, other metropolitan areas, and provinces was also identified.
Compared to 2022-2023, the preference for other Seoul areas has increased steadily and significantly throughout 2024 and the first half of 2025. This contrasts with a decrease in preference for all other regions. Among the three major Seoul districts, GBD maintains the highest preference, while interest in metropolitan areas outside Seoul and provinces has declined. This trend shows that the office market is no longer dependent on specific districts but is evolving into various demand forms.
Efficiency and Cost: A New Market Paradigm
"The choices of tenants in the Seoul office market are gradually changing amid economic uncertainty," analyzed Tae-jin Ahn, a researcher at the RSQUARE Research Center. He added, "In the past, symbolism and location were prioritized, with a strong preference for core districts and large buildings. Now, efficiency and cost-cutting have become core values." He advised that "landlords must now develop detailed strategies, such as attractive discount conditions, internal restructuring, and regional specialization, to attract tenants."
Furthermore, as supply is expected to increase in the future, the report concludes that tenant choices are bringing new changes to the leasing market, a trend that is likely to continue for the foreseeable time.
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▶ RSQUARE publishes '2025 Office Leasing Market Trend Report: Industrial Economic Trends and Leasing Market Changes'
▶ Research Center: "Tenant relocation patterns shift amid economic uncertainty"
▶ Strengthening trend toward cost-cutting and efficiency; diverse forms of leasing demand observed
According to the 2025 Leasing Market Trend Report released by the RSQUARE Research Center (Head: Kang-min Ryu), the Seoul office leasing market is facing a structural inflection point as of October.
The report analyzes that financial burdens on corporations have intensified as the economic coincident index turned downward in the second half of 2023. As the economy enters a slowdown phase, demand for relocation to other areas in Seoul (outside the major hubs) to reduce costs is gradually increasing.
Seoul Leasing Market: Upward Trend in Vacancy Rates
The Seoul office market is expected to face upward pressure on vacancy rates over the next few years, with large-scale supply scheduled to begin in earnest after 2027. Currently, the Yeouido Business District (YBD) records a vacancy rate of 2.68%, while large offices in the Gangnam Business District (GBD) maintain a stable flow in the 1% range. However, despite the vacancy rates in core districts remaining at healthy levels below 5%, the general upward trend is expected to persist.
Gradual Tenant Relocation: Moving Beyond Core Districts
In the first half of 2025, the proportion of tenants relocating to "other areas of Seoul" increased, while the share of those moving into the traditional three major districts—CBD (Jongno/Gwanghwamun), GBD (Gangnam), and YBD (Yeouido)—decreased.
There are also distinct differences by industry. While the relocation share to other Seoul areas increased for all sectors except manufacturing compared to 2022-2023, relocation to the CBD and YBD decreased for all except professional, scientific, and technical services. Interestingly, GBD was the only one among the three major districts to see an increase in relocation share across most industries.
Space Consumption: Smaller Spaces, Reduced Footprints
A significant change has been observed in the pattern of space consumption. In the past, it was common for tenants to move into larger spaces (expansion). Recently, however, there has been a rise in cases where tenants move into smaller spaces (downsizing). The proportion of moves from large or medium-sized buildings to smaller buildings has also expanded, suggesting that the "Flight to Quality" trend—relocating to premium buildings—is somewhat weakening.
In short, tenants are prioritizing efficient space utilization and cost reduction over the "symbolism of a large building."
Regional Preferences: Major Districts Down, Other Areas Up
Data shows that all industry sectors now show a growing preference for relocating to other areas of Seoul. Within the four core districts (including Bundang), industries such as finance/insurance, ICT, professional/scientific/technical services, and construction preferred relocating to the GBD. In contrast, the hospitality/restaurant and transport/warehouse sectors leaned toward the CBD. Some preference for relocation to Bundang/Pangyo, other metropolitan areas, and provinces was also identified.
Compared to 2022-2023, the preference for other Seoul areas has increased steadily and significantly throughout 2024 and the first half of 2025. This contrasts with a decrease in preference for all other regions. Among the three major Seoul districts, GBD maintains the highest preference, while interest in metropolitan areas outside Seoul and provinces has declined. This trend shows that the office market is no longer dependent on specific districts but is evolving into various demand forms.
Efficiency and Cost: A New Market Paradigm
"The choices of tenants in the Seoul office market are gradually changing amid economic uncertainty," analyzed Tae-jin Ahn, a researcher at the RSQUARE Research Center. He added, "In the past, symbolism and location were prioritized, with a strong preference for core districts and large buildings. Now, efficiency and cost-cutting have become core values." He advised that "landlords must now develop detailed strategies, such as attractive discount conditions, internal restructuring, and regional specialization, to attract tenants."
Furthermore, as supply is expected to increase in the future, the report concludes that tenant choices are bringing new changes to the leasing market, a trend that is likely to continue for the foreseeable time.