While office buildings in downtown Seoul are suffering from empty offices, prices for prime buildings are skyrocketing. 

According to real estate consulting firm Remax Korea on the 18th, the sale price per 3.3㎡ of the 'State Tower Namsan' building in Hoehyeon-dong, Jung-gu, Seoul, was 26.23 million won, the highest ever for an office building in Seoul. The Abu Dhabi Investment Authority (ADIA), the largest sovereign wealth fund in the Middle East, was selected as the preferred bidder, and the sale price amounts to 530 billion won.

In the second and fourth quarters of last year, the State Oil Fund of Azerbaijan (SOFAZ), a Middle Eastern sovereign wealth fund, purchased the 'Pine Avenue A Building' in Jung-gu for 477.5 billion won. The sale price per 3.3㎡ of this building also reached 24 million won. Usually, the average sale price per 3.3㎡ of prime buildings in downtown and Gangnam is 20 to 22 million won, but the recent transaction price is said to have exceeded this.

As the prices of these prime buildings soar, the average sales price of office buildings in Seoul is also on the rise. According to a survey conducted by Remax Korea on 200 office buildings in Seoul, the average sales price per 3.3㎡ has been steadily rising from 15.37 million won in the second and fourth quarters of 2010 to 15.81 million won in the second and fourth quarters of this year. 

Remax Korea explains that the reason office building prices are rising despite the rising vacancy rate is because of the preference for safe assets. In a situation where there are no suitable investment destinations due to the sluggish real estate market and low interest rates, institutional investors and foreign funds are considering office buildings as safe investments. 

Jang Jin-taek, director of Remax Korea, said, "During the foreign exchange crisis in 1997 and the global financial crisis in 2008, the perception that 'building prices will not fall in the long term' took hold among investors."