In the first quarter of this year, the office sector saw a decrease in vacancies and an increase in rent. In contrast, the retail market experienced a decline in rent, with vacancies increasing across small, medium, and collective retail spaces.
According to the '2025 First Quarter Commercial Real Estate Rental Trends Survey' released on the 24th by the Korea Real Estate Board, the office rental price index rose by 0.44% compared to the fourth quarter of last year. The national average rent was recorded at 182,000 won per square meter.
In particular, as tenant demand increased in major business districts such as Seoul and Gyeonggi, the downtown area rose by 0.47%, the Gangnam area by 1.07%, and Bundang Station's area by 1.48%.
The office investment yield recorded 1.56%. Both the income yield (0.94%) and the capital yield, which reflects changes in asset value (0.63%), increased.
The office sector experienced a decrease in the vacancy rate as a landlord's market formed due to higher demand than supply. The national office vacancy rate averaged 8.7%, a decrease of 0.2 percentage points from the previous quarter.
In contrast, the retail market saw a decline in rent across all regions except Seoul due to a consumption slowdown from the economic downturn. The integrated retail price index, which includes medium-sized (-0.17%), small (-0.34%), and collective retail spaces (-0.22%), fell by 0.21% compared to the previous quarter.
The vacancy rate in the retail market was highest for medium-sized retail spaces at 13.2%. This was followed by collective retail spaces (10.3%) and small retail spaces (7.3%). The vacancy rate for collective retail spaces in Sejong was 13.6%, while Gyeongbuk's was 26.4%, exceeding the national average.
However, some markets in Gangnam, Seongsu, and Yongsan in Seoul showed an upward trend due to the influx of foreign tourists and young consumers.
The integrated retail price index for Seoul rose by 0.15% compared to the previous quarter. In contrast, areas such as Gwangju's Geumnam-ro and Chungjang-ro (-1.21%) and Wolsan-dong District (-0.97%) saw declines.
The Korea Real Estate Board noted that 'the office market continues to stabilize due to demand centered on prime-grade properties,' while also highlighting that 'the retail sector is experiencing structural contraction due to domestic economic stagnation and an increase in business closures.'