CBRE

FIGURESSEOULQ32025

occupiermarketreportssteadyperformance

0.6%QQ

Q22025GDP

v14.6%Yo-y

Q22025FDl

2.51%

0.31%QQ

Q32025CCSI

Q32025BSI

Q320253MKORIBOR

Q32025CPIINFLATION

Note:Arrowsindicatechangefrompreviousperiod.

HotTopics

?withofficerelocationdemandparticularlywithinthefinanceandmanufacturingsectors,whichtogetheraccountforover40%ofcBDdemandremainingstrong,vacancyis

expectedtodeclineinQ42025.

?chineseretailerscontinuetoacceleratetheirexpansionacrosskorea,ledbygroupssuchasxiaomi,chagee,Miniso,yoyosoandpopMart.

?Leasingvolumeinthelogisticscoldstoragemarkettripledq-o-q,signallingapartialrecoveryindemand.Ecommerceand3PLexpansionwasnotable,drivenbygrowingrequirementsforfreshnesscontrolandfulfillmentefficiency.

?Thisquarter'sresurgenceinofficeinvestmentwasunderpinnedbystableleasing

fundamentals,expectationsofleveragebenefitsfromdeclininginterestrates(withseniorloanratesenteringthe3%range),andimproveddividendyieldoutlooks.

OFFICE

Averagevacancyroseby0.5pptsq-o-qto3.1%inQ32025.Netabsorptionreached31,493sq.m.Facerentscontinuedtheirgradualupwardtrend,rising0.9%q-o-qtokRW39,964persq.m.permonth.Asidefromthethreemainbusinessdistricts,Magokcontinuedtoattractadiversepoolofoccupiers.

RETAIL

AsofAugust2025,cumulativeretailsalesfortheyeartotaledapproximatelykRW428trillion,up1.8%yo-y.ThecumulativenumberofinboundtouristsfromJanuarytoAugustrose16%y-o-yto12.38million,eclipsing2019levels.Retailers,particularlythoseinfashionandbeauty,continuedtoexpand.

LOGISTICS

Newsupplytotaled374,861sq.m.,bringingthey-t-dfigureto765,020sq.m,down68%y-0-y.Leasing

volumereached699,758sq.m.onthebackofrapidstabilizationamongnewlydeliveredfacilities.Askingrentsheldsteadyq-0-q.Leasingdemandcontinuedtobedominatedbyecommerceand3PLtenants.

INVESTMENT

seoulcommercialrealestateinvestmentvolumereachedkRW7.95trillioninQ32025,up1.4%y-0-y.

InvestmentvolumereachedkRW25trilliony-t-d,surpassingthekRW22trillionrecordedin2024.officetransactionsdominated,accountingforkRW7.66trillion,or77%oftotalinvestmentvolume.

ofce

Theaveragevacancyrateacrossseoul'sthreemajorofficedistrictsroseby0.5pptsq-o-qto

3.1%inQ32025.Despitetheabsenceofnewsupplythisquarter,netabsorptionreached31,493sq.m,supportedbyoccupierstakingpossessionofunitsatkTGwanghwamunBuildingwestinthecBD,whichoffsetincreasesinvacancieswithinthecBDandyBD.

Facerentscontinuedtheirgradualupwardtrend,rising0.9%q-o-qtokRW39,964persq.m.permonth.withrent-freeperiodsremainingatunderonemonthperyearonaverage,effective

rentsincreased1.0%q-0-qtokRW37,624persq.m.permonth.Leasingvolumetotaled102,885sq.m,maintainingasimilarleveltothepreviousquarter.

InthecBD,thevacancyrateclimbed0.9pptsq-o-qto4.1%aslargecorporatessuchasskandshinsegaeexecutedstrategicrelocations,andnewlycompletedassetstooktimetostabilize.

withrelocationdemandamongtenantsparticularlywithinthefinanceandmanufacturingsectors,whichtogetheraccountforover40%ofcBDdemandremainingstrong,vacancyisexpectedtodeclineinQ42025.pre-leasingforupcomingprojectsincludingG1seoul,Eul

Tower,andRen?squareisunderway,signalingagradualrecoveryinleasingmomentum.

TheGBDrecordedaslightdeclineinvacancyfrom1.7%to1.5%,drivenbysustainedrelocationandexpansiondemandfromfinanceandITcompaniesamidlimitednewsupply.Tight

availabilityinexistingGradeAassetstranslatedintoheightenedinterestinupcomingproperties.

IntheyBD,thevacancyrateincreased0.8pptsq-0-qto3.6%followingcontractionsbyseverallargecorporateaffiliatesandacryptocurrencyexchange,aswellasGcwellbeing'srelocationtowangsimni.Theimpactwaspartlyoffsetbynewmove-ins-suchasthekoreaFireInsurance

Association(rebuildingitsheadquarters)andNHNongHyupcapital(postassetsale)attherefurbishedonecentinel(formershinhanInvestmentBuilding).

Magok,whichisemergingasanewbusinesshubinsouthwesternseoul,continuedtoattractadiversepoolofoccupiers,particularlyaroundoneGrove(cp4).Recenttransactionsinclude

SUMAir(asmall-airlineoperator),DSVAir&seaLtd(aglobalfreightforwarder),andTurner&Townsendkorea.Thesetenantsrepresentnew,notrelocation,demandfromexistingcore

districts.Magokisestablishingitselfasaclusterforaviation-relatedoccupierswhileevolvingintoamixedbusinessareaencompassingbothconstructionandfinancialservices.

FIGURE1:officesupplyDemandDynamicsunit:sq.m,10Thousands

TABLE1:officevacancyandEffectiveRents

Q32025seoulCBDGBDYBD

vacancyrate(%)

3.1

4.1

1.5

3.6

Q--Q(%P)

+0.5

+0.9

+0.8

Y--Y(%P)

+0.4

+1.9

Effectiverent(KRW/sq.m./mth)

37,624

36,844

42,795

33,384

Q--Q(%)

+1.O

+0.9

+1.5

+0.5

Y--Y(%)

+6.3

+6.6

+8.0

+3.9

source:CBREResearch,Q32025.

Retail

AsofAugust2025,cumulativeretailsalesfortheyeartotaledapproximatelykRW428trillion,up1.8%y-o-y.Bystoretype,salesatdepartmentstores(-0.2%)andhypermarkets(-2.1%)recordedmodestdeclines,whilesupermarketsandgeneralmerchandisestores(+1.0%)remainedstable,

andspecialtyretailstores(+2.1%)postedgrowth.TheconsumersentimentIndexroseforfiveconsecutivemonthstoreach111inAugust,thehighestlevelsincetheonsetofthecovID-19pandemicin2021,reflectingtheimpactofrecentpublicReliefconsumptioncoupon.

DrivenbytheglobalpopularityofkoreantelevisionshowsalongsidecontinuedglobalinterestinK-beautyandk-food,thecumulativenumberofinboundtouristsfromJanuarytoAugustrose

16%y-o-ytoapproximately12.38million,eclipsing2019levels.Thetemporaryvisa-freeentrypolicyforchinesegrouptravelersacceleratedtherecoveryofthissegment,whichhas

historicallyaccountedforhalfoftotalinboundvisitors,thoughitsoverallsharehasdecreased.

withdomesticconsumptionsentimentandforeigntouristinflowsexpectedtoremainstronginH22025,theretailsectorcontinuedtoseeactiveexpansion,particularlyacrossthefashionandbeautycategories.Myeong-dong'svacancyratedeclinedforthefourthconsecutivequarter,

enteringthe7%rangeasofQ22025thelowestlevelsince2018.whilelargescaleF&B

operatorsoncedominatedthedistrict,itstenantmixisshiftingtowardfashion,beauty,andmedicalsectors.InGangnam,vacancyreboundedto7%afterfalling5pptsduringQ22025,markingthefirstdeclinefollowingayearofincreases.strongdemandfrommedicaltenants,suchassecretclinicandGangnamunni,supportedarecoveryinoccupancy.

seongsumaintaineditsstatusasoneofseoul'smostdynamicretailsubmarkets,underpinnedbystrongleasingdemand.NewopeningsbyGeneralldea,2kids,andLakareinforcedits

positioningasakeyk-fashionhub.Risingspendingbyforeignvisitorsfurtherbolsteredlocal

retailperformance,withforeigncardtransactionsinseongsuup226%y-o-y.However,persistentrentandkeymoney(premium)increaseshavedrivensometenantstonearbysecondaryareas.

chinesebrandscontinuedtoacceleratetheirexpansionacrosskoreathisquarter.xiaomi

openeditsfirststoreatIFCMallyeouido,broadeningitsdomesticpresence.IntheF&Bsegment,milk-teabrandchageeispreparingtolaunch,whilelifestyleretailerMinisoandcharactergoodsbrandyoyosocontinuetodifferentiatethemselvesthroughcharacter-relatedmerchandise.Alsothisquarter,POPMartopenedanewstoreatshinsegaecentumcityits10thinkorea

strengtheningitsfocusontargetingGenzconsumers.

FIGURE2:RetailsalesvolumeGrowthRatevs.visitorsArrivals

source:CBREResearch,Q32025.FIGURE3:RetailRents

unit:ThousandkRW

Logistics

NewsupplyintheGreaterseoulGradeAlogisticsmarkettotaled374,861sq.m.inQ32025,

bringingthey-t-dfigureto765,020sq.m,down68%y-0-y.supplycontinuedtocontract,withsixprojectscompletedthisquarter,60%ofwhichwereconcentratedinyeojuandAnseong.

Leasingvolumereached699,758sq.m.onthebackofrapidstabilizationamongnewlydeliveredfacilitiesinthesouthernGyeonggiregion.Robustexpansionby3PLoperatorsinAnseongandlcheonresultedin70%ofnewlycompletedlease-typefacilitiesbeingpre-letuponcompletion.

Leasingdemandcontinuedtobedominatedbyecommerceand3PLtenants,whichaccountedforover95%oftotaltransactions.Expansionwasmostprominentinthesoutheastern

corridorincludingyeojuandAnseongwherecoupangsecuredtheentireyeojuJeombong-dongLogisticscenter(122,000sq.m.)asanewhub,whilerenewalsatexistingassetsinyonginunderscoredpersistentdemand.Inthewesterncorridor(e.g,Incheon),e-commercecompaniesremainedactiveinsecuringfacilitiestostrengthenoverseaslogisticsnetworksand

accommodateimport-exportvolumegrowth.

E-commerceand3PLexpansionwasalsonotableinthecold-storagesegment,drivenby

growingrequirementsforfreshnesscontrolandfulfillmentefficiency.Leasingvolumeinthecold-storagemarkettripledq-o-q,signalingapartialrecoveryindemand.However,vacancyremainedelevatedataround30%,suggestingfullstabilizationisstillsomewayoff.

Amidstrongdemandandlimitednewsupply,overallvacancyisexpectedtocontinuetrendingdownward.Large-scaleassetsinthesouthernsubmarketareanticipatedtoexperience

heightenedtenantcompetitionandshorterrentfreeperiodsduetosupplyconstraints.primeassetsinAnseongarealreadynearfulloccupancy(~o%vacancy),whileassetsexceeding

100,000sq.m.inIcheonmaintainvacancyratesbelow5%.Askingrentsheldsteadyq-o-q,

ontheinvestmentside,transactionactivityremainedrobustandwasdrivenbyforeign

institutionalbuyersalongsideincreasingparticipationfromdomesticpensionandmutual-aidfunds.ThenumberoftransactionsabovekRW50billiontotaled16withanaggregatevalueofKRW2.6trillion,ofwhichforeigncapitalaccountedforapproximately70%(KRW1.8trillion).

Despiteexpectationsofpolicyratecuts,achievingattractivefinancingcostsforlogisticsacquisitionscontinuestodependonmultiplefactorssuchasassetspecifications,sponsorcreditquality,tenantmix,andtheshareofambient-temperaturespace.

FIGURE4:GreaterseoulLogisticssupplyandvacancyunit:sq.m,10Thousands

FIGURE5:GreaterseoulLogisticsRentsunit:KRW/pveong/mth

12%

8%

50,00040,00030,000

20,000

4%

0%

-4%

DrycAGR(H12023-H12025,RHS)●DryRent(LHS)coldRent(LHS)source:CBREResearch,Q32025.

Investment

seoulcommercialrealestateinvestmentvolumereachedkRW7.95trillioninQ32025,up1.4%v-o-y.IflargescaletransactionsintheBundangBusinessDistrict(BBD)areincluded,thetotalexpandstoapproximatelykRW10trillion.InvestmentvolumereachedkRW25trilliony-t-d,

surpassingthekRW22trillionrecordedin2024.withseveralmajordealsexpectedtocloseinQ42025,full-yeartransactionvolumeisprojectedtoexceedkRW30trillionbyyear-end.

officetransactionsdominated,accountingforkRW7.66trillion,or77%oftotalinvestmentvolume.FourteenlargescaledealsexceedingkRW100billioneachwererecorded,totalingapproximatelykRW6.7trillion.ThelargestsingletransactionwaspangyoTechoneTower,whichchangedhandsforapproximatelykRW1.9trillion.

Theresurgenceinofficeinvestmentwasunderpinnedbystableleasingfundamentals,

expectationsofleveragebenefitsfromdeclininginterestrates(withseniorloanratesenteringthe3%range),andimproveddividendyieldoutlooks.strategicinvestorswereparticularly

active,participatingin13transactionsthroughQ32024,representingacombinedvalueofapproximatelykRW6.4trillion,asignificantshareofoverallinvestmentvolume.

LogisticstransactionstotaledkRW1.26trillion,markinga2.6xincreaseq-o-q.sustainedforeigncapitalinflowscontinuedtotargetstabilized,high-occupancyassets,whilepartialdomestic

participationwasalsoobservedinongoingdeals.AsprojectedincBRE'srecentreport,logisticsinvestmentfrombothdomesticandinternationalinvestorsisexpectedtoincreaseasoversupplyconcernsgraduallyease.

Majorhoteldealsincludedparasparaseoul,whichwasacquiredbyHanwhaHotels&ResortsfromsamjungEnterpriseviaasharedealforkRW420billion,includingdebtassumption.Retailtransactionsremainedlimited,primarilyinvolvingcorporate-to-corporatedealswithinmajor

high-streetlocationssuchascheongdam-dongandsinsa-dong.

AsofQ32025,averageyieldsstoodat4.2%forseoulGradeAofficesand5.3%forGreaterseoulGradeAlogisticsassets,bothremainingstableq-0-q.Althoughmonetarypolicyhasturned

moreaccommodativeandfinancingrateshavegraduallystabilized,muchoftheanticipatedrepricinghasalreadybeenreflected,limitingfurtheryieldcompression.LookingaheadtoQ42025,yieldsareexpectedtoremainbroadlyflat,withvariationsdependingonassetquality,location,anddealstructure,includingstrategicinvestorparticipation.

FIGURE6:office,Logistics,GovernmentBondyieldspread

TABLE2:MajorTransactions,Q32025

sector

office

property

price(KRwbln)

Buyerseller

MiraeAssetGlobalAMC

koreaInvestmentRealAsse

tsManagementkakaoBank

pangyoTechoneTower

19,820

office

Tower730

8,700

BentallGreenoak

HyundaiInvestmentAMC

office

NCTowerl

4,435

pacificAMC(KSEMA)

NCSOFT

Logistics

HwaseongJegiriLogisticscenter

2,700

kreateAMC

(KKR)

JRInvestmentManagement

Logistics

MaegokDC

940

pacificAMC

(KKR)

kendallsquareAMC

Hotel

parasparaseoul

4,200

HanwhaHotel&Resort

samjungcorp.

source:CBREResearch,Q32025.

surveycriteria

?GradeAoffice:Locatedinoneofthethreemajorbusinessdistrictsinseoul(CBD,GBD,andyBD)withagrossfloorareaof33,000sq.m.ormore.

?Definedbyquantitativeandqualitativefactorssuchascompletiondate,tenant,andrentlevel.

office

District

Location

NO.ofassets

Avg.GFA(sq.m.)

Avg.completionyear

CBD

Jongno-gu,Jung-gu

54

70,228

2003

GBD

Gangnam-gu,seocho-gu

38

69,147

2004

YBD

yeongdeungpo-gu,yeouidodong

23

88,311

2006

?EffectiveRent:ReflectrentfreeincentivesofeachassettofacerentRetail

?Retailmarketsales:basedondatafromkoreastatistics,excludepassengervehicleandfuelsales.

?onlineshoppingsales:excludeonlineservicesalesfromoverallonlineshoppingsales

?GradeALogistics:LocatedinGreaterseoul(GyeonggidoandIncheon)withagrossfloorareaof33,000sq.m.ormore.

?Definedbyquantitativeandqualitativefactorssuchascompletiondate,floorheight,distancefromIC,andrentlevel.

Logistics

NO.ofsubmarkets

NO.ofassets

Avg.GFA(sq.m.)

Avg.completionyear

24

322

72,063

2020

?Dataupdates:conductresearchonquarterly(supply)andbiannually(vacancy,rents,tenants)

Investment

?Transactionvolume:Amongoffice,retail,andhotelassetslocatedinseoulandlogisticsassets(logisticscentreandfactory)locatedinGreaterseoul,transactionsworthmorethankRW10billionareincluded.

?Transacted