Since the government announced its housing market stabilization measures on October 15th, attention is focused on the future of the commercial real estate market, which has avoided the direct hit of regulations.

Commercial real estate continued to rise, particularly in downtown Seoul, amidst a mix of favorable factors, including easing "Korea Risk" in the first half of the year, a buoyant stock market, the entry of foreign companies into the domestic market, and a recovery in tourism. Conversely, the Gyeonggi region, which along with Seoul had shown stable supply and absorption, is experiencing a rise in vacancy rates due to accumulated fatigue from a prolonged period of oversupply.

With the October 15th measures announced, a large number of star-studded prime office buildings are expected to be released by the end of the year, leaving a variety of variables at play that could shape the market landscape. Will the commercial real estate market cool down or enter a period of restructuring?

First-half rebound, trading volume exceeds 17 trillion won

According to the "2025 Q3 Office Market Report" published by the Zenstarmate Research Center, the cumulative office transaction volume in Seoul and Bundang reached 17.2 trillion won as of the third quarter of this year. Of this total, Seoul accounted for 15 trillion won, and Bundang accounted for 2.2 trillion won. This means that Seoul alone has already reached the annual record (15 trillion won) for both Seoul and Bundang in 2021.

This year, in particular, the active participation of strategic investors (SIs), moving away from the institutional investor-centric market, has been a key factor in the expansion of transactions. With an increase in transactions driven by actual demand, such as the purchase of company buildings, the cumulative share of SI purchases reached 37.41 TP3T, an increase of approximately 181 TP3T points compared to 2024 (19.21 TP3T). This demand is concentrated in the Seoul CBD and Gangnam districts (GBD).

Seoul's downtown area and the Gyeonggi area within the metropolitan area have different perspectives.

The Seoul and Gyeonggi office market has seen a sharp divergence since the third quarter. According to CBRE's "Seoul Figures Q3 2025," the average vacancy rate for Grade A offices in Seoul's major business districts rose slightly to 3.11 tp3t, while the Gangnam area (GBD) actually saw a decline to 1.51 tp3t. This suggests a qualitative shift in leasing demand, leading to a continued strong trend centered around the city center and Gangnam.

Meanwhile, the Gyeonggi-do office market, once vibrant thanks to the metropolitan techno valley and data centers, is now facing the dual burden of oversupply and a funding crunch. While investment sentiment in outlying commercial districts has weakened, downtown Seoul and Gangnam are maintaining a virtuous cycle, fueled by stable rental demand and expectations of lower interest rates.

A Year of "Record-Breaking Sales": A Watershed Q4

A series of major prime office asset sales are scheduled for the fourth quarter of this year. Key assets such as Heungkuk Life Insurance's Shinmunro headquarters, LG Gwanghwamun Building, and Gwanghwamun G Square have entered the sale process. If these deals are finalized, annual transaction volume in the Seoul-Bundang area is projected to exceed 20 trillion won by 2025.

Even looking at transaction flow through the third quarter alone, the market's strength is stronger than expected. Seoul office transactions in the third quarter amounted to KRW 4.7162 trillion, a decrease of 131 trillion from the previous quarter but an increase of 41 trillion from the same period last year. In Bundang, the transaction of Pangyo Techwon (KRW 1.982 trillion) marked the largest quarterly transaction ever.

Reorganization, not cooling, Gangnam remains the center

Since the October 15th measures, the commercial real estate market has been experiencing a trend of selective restructuring and recovery, rather than a cooling-off. The controversy surrounding the reduction of non-residential loans ended as a mere incident, alleviating concerns about a funding crunch. Furthermore, with the entire metropolitan area designated as a regulated zone, market segmentation based on locational competitiveness has become more pronounced.

While the Gyeonggi region, burdened by accumulated supply, is inevitably facing adjustments, Gangnam and the city center are actually strengthening their stability through an endogenous virtuous cycle of industry, finance, and consumption. With positive factors in the real economy, such as the influx of foreign companies into Korea, recovering tourism demand, and a buoyant stock market, the commercial market is showing signs of a gradual recovery rather than a cooling.

Ultimately, while the intensity of regulation is the same, the market's resilience differs. The direction of large-scale office transactions in the second half of this year will be the stage where that resilience will be demonstrated.