Recently, as the number of empty offices in buildings in Yeouido, Seoul has increased, competition to attract tenants has become fierce. Rent discounts are the norm, and ‘rent-free’ contracts that exempt monthly rent for 2-3 months have been appearing, and recently, lease contracts, which are not easily seen in office lease contracts, have been taking place. 

■Average vacancy rate in Yeouido area: 17.2% 

According to real estate management companies such as Kyobo Realco on the 18th, the average vacancy rate of large office buildings in the Yeouido area of Seoul last month was 17.2%. This is relatively high compared to Gangnam area of Seoul (5.3%) and downtown area (9.1%), and is nearly double the Seoul average (9.2%). Since September 2012, when the Seoul International Finance Center (IFC) One building was completed, the Yeouido area has consistently maintained a vacancy rate of over 15%. 

Currently, One IFC building is fully occupied with 1,001 TP3T, but the 55-story Three IFC building is completely vacant, and Two IFC building only has 601 TP3T. The building management industry also reports that half of the Federation of Korean Industries building in Yeouido (6 basement floors to 50 floors above ground), which was completed at the end of last year, is vacant. 

A landmark building in Yeouido is about to sign a lease with an association as the vacancy rate has increased since a securities firm that used to occupy several floors moved out in late 2012. A building official said that they have currently proposed a lease contract and are planning to sign a formal contract at the end of this month or early next month, explaining that they decided that a lease that allows them to manage their money would be better than one that has recently been exempting monthly rent for up to six months in Yeouido. 

■A series of groundbreaking contracts 

Jang Jin-taek, director of Remax Korea, said that most office building lease contracts are monthly rents with almost no jeonse, and that the fact that they signed a jeonse contract is groundbreaking. He continued that in the case of Yeouido, after the IFC building came in, the vacancy rate increased and tenants were in a difficult position, and that there were even cases where they resolved contract penalties with existing buildings on behalf of companies hoping to move in. 

There are also increasing cases of people doing interior design instead.

Team leader Jeong Dong-hoon of Won Building said that with the recent skyrocketing vacancy rate in Yeouido, it has become more difficult to 'attract tenants', and in the case of small and medium-sized buildings, some are doing interior construction for room facilities such as internal partitions in conference rooms for companies moving in, and in the case of large buildings, there are cases of lease contracts that were not common in the past.