Office building investment in Korea hit record high in 2018
Investment in office buildings in South Korea hit a record high of 11.6 trillion won ($10.3 billion) in 2018 as individuals as well as companies diversified their investment means amid a protracted low interest rate environment.
Transactions in office buildings in the country totaled 11.6 trillion won last year, generating 2.9 trillion won in the final quarter alone, according to global property agent Savills Korea on Friday.
The number of deals worth more than 300 billion won doubled on year to 12 in 2018, accounting for half of the total annual volume.
The deals closed in the fourth quarter include Centropolis, SK U Tower, HP Building, The Prime Yongsan, Dream Tower and KG Tower.
Sales to be finalized in the first quarter of this year are Summit Tower, Seoul Square, State Tower Namsan and Samsung SDS Tower, a Savills Korea official said.
There is likely to be a steady flow of offices for sale whose funds are set to expire this year, the official noted, adding that companies and billionaires are also putting their properties out on the market at a strong clip.
As of late 2018, the vacancy rate of offices in Seoul’s three prime districts, where a majority of offices are concentrated, was 12.4 percent, up 0.7 percentage point from the previous three months.
Central Business District (CBD) in the city center - an area encompassing Gwanghwamun, City Hall and Seoul Station - showed a vacancy rate of 15.7, up 3.2 percentage points on quarter with the opening of the new high-rise Centropolis.
Gangnam Business District (GBD)’s office vacancy rate was 7.7 percent, down 0.3 percentage point on sustained demand. The rate in Yeoido Business District (YBD), home to many bank headquarters and financial institutions, was 12.1 percent.
By Lee Mi-yeon and Kim Hyo-jin
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]