Seoul’s office market stirred back to life in H1 2025. Corebeat’s research pegs transaction volume at ₩11.3 trillion—up roughly ₩8 trillion from the same period last year.

With memories of the rate-shock still fresh, it’s tempting to call this a full “spring thaw.” Compared to the liquidity-fueled 2021 peak (₩15.2 trillion), the scale certainly feels familiar. The mood, however, is different: this rebound is more structural than speculative.

Insight Report No. 12, published on August 7, dissects the first-half deals through that structural lens—arguing this isn’t a mere bounce, but potentially a turn in the market’s underlying playbook.

Unlike the last cycle—when financial investors (FIs) set the pace—owner-occupiers and corporates (strategic investors, or SIs) led H1 2025, accounting for 45% of all transactions.

FIs made up 24%. Strip out National Pension Service’s one-off, outsized purchase of Magok One Grove and FI share shrinks to ~5% of total deals. In other words, in a >₩11 trillion Seoul office market, pensions and other FIs deployed well under ₩600 billion.

Why the switch? Because for many occupiers, office has flipped from “return-seeking asset” to “cost-control lever.” Surging rents, fit-out costs, and moving expenses push CFOs toward a simple calculus: if the rent reset is too painful, “we’d rather buy than lease.”

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  Exhibit A: Dongyang Life. At its October 2023 expiry, the landlord initially sought a 60% rent hike; the parties settled at +30%. Dongyang Life subsequently purchased nearby K-Square City—locking in long-term control and cost visibility.

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  Exhibit B: Kumho Petrochemical at Signature Tower. Current NOC is about ₩260,000 per pyeong (≈ ₩78,700/sqm). Market levels imply ~₩350,000 per pyeong (≈ ₩105,900/sqm) at the 2027 renewal—a ~26% jump, a meaningful burden given sector headwinds.

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  Momentum buyers: Bithumb acquired Gangnam N Tower for ₩680.5 billion; CJ Olive Young bought KDB Life Tower for ₩674.4 billion. Strong recent earnings—and a desire to control long-term occupancy costs—pulled them into the buyer column.

Bottom line: the lane has opened for SIs, and they’re using it.

So where did the FIs go? Many stepped back from Korean offices—either exiting or pivoting to credit and alternative sectors.

A clear case is CPPIB. After selling the Concordian Building, CPPIB effectively reset its Korea office exposure to zero and redeployed into other verticals:

• Data centers with Pacific Asset Management (~₩1 trillion),

• Logistics credit with ESR Kendall Square (~₩500 billion),

• Residential via a TPG Angelo Gordon credit strategy (₩500 billion) and Mangrove equity (₩500 billion).

Net effect: practical office exit; ~₩2 trillion in fresh capital into data centers, logistics, and living.

Layer on top a broader domestic shift toward senior debt and preferred structures, and you have fewer FI bid sheets on offices—precisely the gap SIs have filled.

• SI demand durability: Do rent resets and relocation math keep pushing corporates to buy, or does easing inflation temper the urgency?

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  Supply pipeline & positioning: New deliveries and policy-driven density can change submarket dynamics. Winners will be assets with clear user propositions (location, specs, efficiency) rather than generic Grade A labels.

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  FI re-entry conditions: Stabilized yields, cheaper financing, or distress could draw selective FI capital back—likely via credit first, then equity.

The takeaway: This is not 2021 redux. The market is being re-wired around users’ P&L. In a regime where “office = cost control,” buyer profiles, hold logic, and asset business plans look very different—and that’s exactly where H1’s strength came from.