Office Rents Rise While Store Rents Fall in Q2, Though Investment Returns Edge Up Across the Board

Nationwide office rental prices rose in the second quarter of this year compared to the previous quarter, while retail store rental prices saw a slight decline.

However, as asset values increased, particularly centered around the capital area, investment returns for all types of offices and retail stores rose. According to the Q2 2026 commercial real estate rental market trends survey released by the Korea Real Estate Board today (the 30th), the office rental price index for the second quarter rose 0.42% from the previous quarter.

On the other hand, the integrated retail store rental price index fell by 0.03%.

Broken down by store type, the rental price index for medium-to-large stores remained flat, while small stores and stratified stores declined by 0.14% and 0.04%, respectively.

The national average rents per square meter stood at 18,900 won for offices. For retail stores, stratified stores averaged 27,000 won, medium-to-large stores 26,700 won, and small stores 20,600 won.

In the office rental market, steady tenant demand in major business districts such as Seoul, Gyeonggi, and Busan drove the upward trend in the rental price index.

In Seoul, demand for prime offices in the Gangnam and downtown districts continued. In Yeouido, the rental price index jumped 0.61% driven by increased relocation demand stemming from reconstruction projects.

In the retail rental market, the downward trend in rental prices persisted due to commercial stagnation caused by declining private consumption.

While Seoul and Busan maintained an upward trend centered around major commercial districts, other regions were affected by prolonged vacancies and declining sales.

In Seoul, high rent growth continued, led by areas packed with foreign tourists such as Myeong-dong (3.19%), Ttukseom (2.55%), and Jongno (1.28%), pushing the city's rental price index up by 0.46%. Meanwhile, North Chungcheong Province saw a 0.27% drop due to rising vacancies around innovation cities and university districts.

Driven by rising asset values mainly in the capital area, investment returns increased from the previous quarter across all categories: offices at 2.15%, stratified stores at 1.30%, medium-to-large stores at 1.10%, and small stores at 0.86%.

The nationwide vacancy rates were recorded at 9.0% for offices, 13.4% for general retail stores, and 10.5% for stratified stores.

The vacancy rate for the first floor of general retail stores stood at 6.7%.

(Photo provided by Korea Real Estate Board, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.