Seoul’s Central Business District (CBD) is heading into an unprecedented office construction cycle.

By 2030, the area is projected to add 2.48 million square meters of new office space—nearly triple the total supply delivered over the past 11 years. With that kind of volume flooding the market, investors and landlords are facing a growing challenge: not just who will lease the space, but how to keep their existing tenants from walking out the door.

The outlook comes from CoreBeat Insight Vol. 5, a subscription-based research report released on April 29, offering a deep dive into Seoul’s development pipeline, market risks, and investor strategies.

From 2024 to 2030, 28 new buildings are set to hit the CBD alone.

The most dramatic spike comes in 2029, when 10 buildings—nearly half of the total pipeline—are scheduled for delivery in a single year. That kind of concentrated supply risks overwhelming market absorption and could trigger ripple effects across all Seoul office submarkets.

Some in the market suggest oversupply concerns might be overblown, citing the possibility that one-third of new space may go to owner-occupiers, and another third may never reach completion due to permitting or financing delays.

But CoreBeat’s data shows a different picture: 21 of the 28 projects are either already under construction or have locked in full project financing. This makes large-scale deferrals unlikely and raises the odds of a real, time-sensitive mismatch between supply and demand.

What’s fueling this surge isn’t tenant demand—it’s redevelopment policy. In February 2023, the Seoul Metropolitan Government introduced the “2030 Seoul Urban and Residential Environment Redevelopment Plan,” easing rules on floor area ratios and building heights.

The result? More large projects penciling out as profitable, even in the face of rising construction and borrowing costs.

But a major concern is that nearly 80% of the upcoming office supply is being built on a speculative basis—with no tenants signed before construction. And these aren’t small buildings: most are large-scale, high-rise projects that will pour a huge volume of space into the market all at once.

That makes the risk of an extended lease-up period all the more real, and with it, growing pressure on rents across the board.

CoreBeat recommends a shift in underwriting assumptions, including:

·        Stress-tested rent scenarios through 2029–2031

·        Lower stabilization speed assumptions for future acquisitions

·        Clear tenant acquisition plans for value-add or redevelopment plays

For current owners, this isn’t just a future problem. As shiny new towers start competing for tenants, even stabilized buildings could face rising rollover risk. That means landlords will need to fight harder to keep tenants in place—offering better services, more flexibility, and sharper leasing strategies.

Passive ownership won’t cut it in this cycle. Institutional investors with existing Seoul exposure are advised to reassess portfolio resilience, particularly in B-grade CBD assets that may lose competitiveness amid new premium stock entering the market.

As one investment manager put it:

“This isn’t just about who signs leases in 2029. It’s about whether you can hold on to your tenants in 2025.”

This article was originally published by Corebeat on April 29, 2025.