Commercial office buildings in Seoul saw their vacancy rates fall in the first quarter of 2019, data showed April 5.
For Grade A office buildings in Seoul’s three major districts, the average vacancy rate came to 9.1 percent in the first quarter of 2019, down 1.2 percentage points on-quarter, according to data from commercial real estate service firm Cushman & Wakefield.
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The figure slid by 1.6 percentage points through the fourth quarter of 2018, after hitting a five-year high with 11.9 percent in the third quarter the same year.
The improvement can be “mainly attributed to a combination of little to no new supply during the quarter, as well as rapid absorption of availabilities in Yeouido due to aggressive rental marketing,” wrote Philip Jin, head of research at Cushman & Wakefield’s Seoul unit.
The rate for the Yeouido business district, home to International Financial Center Seoul, slid 2.6 percentage points on-quarter.
The fall was the steepest among the three major business districts: the Gangnam vicinity, the Yeouido vicinity and the city center. The regions’ combined inventory spans 7.3 million square meters, while some 2 million square meters of office space is under construction.
Jin pointed to a decelerating gross domestic product in South Korea, as well as a protracted slowdown and uncertainties related to the US-China trade dispute.
“Seoul’s office occupier market continues to remain tilted in favor of the tenant,” Jin wrote. “Economic growth remains the wildcard for the office occupier market this year.”
Meanwhile, the central business district is likely to see higher vacancy rates in the second quarter with the opening of two new buildings: Seosomun 5 District with 38,200 square meters of floor space and the Summit Tower with 145,400 square meters.
By Son Ji-hyoung (firstname.lastname@example.org)