Strategic Flexibility Highlighted in a Fast Changing Market
ECONOMY
office
investment
retail
Logistics
• Slight improvement in GDP growth
• Record low interest rates
• Limited Job market improvement
• Mega supplies
• Upgrade and consolidation demand
• Different outlook for individual districts
ECONoMY
• Investment market upbeat continues
• Public real estate investment poised to grow • Megatrends to drive interest in niche sectors
• Omnichannel adoption to accelerate
• New destinations emerge for street shops
• Traditional retailers seek to boost performance
• New supply to surge to record high
• Balance moving towards tenants
• Logistics investment set to remain robust
Mega supplies
Approximately 730,000 sq. m. of new Grade A office supply will push up overall vacancy of Seoul
office
Upgrade and
consolidation demand
Steady expansion by IT, financial and professional services firms will ensure net absorption to remain stable
Different outlook
for individual districts Average effective rent of CBD and GBD forecasted to increase but YBD’s figure expected to fall
economy
Slight improvement in GDP
growth
CBRE expects national GDP to expand by 2.1% in 2020, supported by
record low interest
rates
Record low interest rates
Base interest rate is unlikely to change
Limited Job market
improvement
The number of new jobs added in 2020 is forecasted to decrease due to sluggish economy and aging population
Investment
retail
logistics
Omnichannel adoption to
accelerate
Large experiential stores, specialist stores, bigger retail arcades and
digital stores
becoming more
prominent
New destinations
emerge for street shops
Shopping malls will continue to transform into activity centresSecond tier high streets will remain sought after by retailers, along with the rise of once prosperous retro high streets
Traditional retailers seek
to boost performance Shopping malls and hypermarts will continuously introduce new brands and redesign floor plans
Logistics investment set to
remain robust
Experienced investors are now engaging in development projects and outbound logistics investment
Balance moving towards
tenants
Although the situation varies, landlords are offering longer rent-free periods to secure tenants before completion
New supply to surge to
record high
Supply is forecasted to rise, bulk of which will come on stream in
the southern area
like Icheon, Yongin,
and Anseong
Investment market
upbeat continues
Transaction volume is expected to exceed past five years average of KRW 10 trillion in 2020
Public real estate
investment poised to grow
REITs products emerging as attractive investment option as the government introduces active measures such as tax benefits
Megatrends to drive
interest in niche sectors
Investment interest in logistics facilities, data centres and rental housing is poised to grow further in 2020
Strategic Flexibility Highlighted in a Fast Changing Market
• Slight improvement in GDP growth
• Record low interest rates
• Limited Job market improvement
ECONoMY
• Mega supplies
• Upgrade and consolidation demand
• Different outlook for individual districts
office
• Investment market upbeat continues
• Public real estate investment poised to grow
• Megatrends to drive interest in niche sectors
investment
• Omnichannel adoption to accelerate
• New destinations emerge for street shops
• Traditional retailers seek to boost performance
retail
• New supply to surge to record high
• Balance moving towards tenants
• Logistics investment set to remain robust
Logistics
office
Mega supplies
Approximately 730,000 sq. m. of new Grade A office supply will push up overall vacancy of Seoul
Upgrade and
consolidation demand
Steady expansion by IT, financial and professional services firms will ensure net absorption to remain stable
Different outlook
for individual districts Average effective rent of CBD and GBD forecasted to increase but YBD’s figure expected to fall
economy
Slight improvement in GDP
growth
CBRE expects national GDP to expand by 2.1% in
2020, supported by
record low interest
rates
Record low interest rates
Base interest rate is unlikely to change
Limited Job market
improvement
The number of new jobs added in 2020 is forecasted to decrease due to sluggish economy and aging population
retail
Omnichannel adoption to
accelerate
Large experiential stores, specialist stores, bigger retail arcades and
digital stores
becoming more
prominent
New destinations
emerge for street shops
Shopping malls will continue to transform into activity centresSecond tier high streets will remain sought after by retailers, along with the rise of once prosperous retro high streets
Traditional retailers seek
to boost performance Shopping malls and hypermarts will continuously introduce new brands and redesign floor plans
logistics
Logistics investment set to
remain robust
Experienced investors are now engaging in development projects and outbound logistics investment
Balance moving towards
tenants
Although the situation varies, landlords are offering longer rent-free periods to secure tenants before completion
New supply to surge to
record high
Supply is forecasted to rise, bulk of which will come on stream in
the southern area
like Icheon, Yongin,
and Anseong
Investment
Investment market
upbeat continues
Transaction volume is expected to exceed past five years average of KRW 10 trillion in 2020
Public real estate
investment poised to grow
REITs products emerging as attractive investment option as the government introduces active measures such as tax benefits
Megatrends to drive
interest in niche sectors
Investment interest in logistics facilities, data centres and rental housing is poised to grow further in 2020
