This article was published on Signal, the capital markets compass, at 10:54 a.m. on May 7, 2026.
Choi Sung-hyun, vice president and head of capital markets at CBRE Korea, said concerns over oversupply in Seoul's Central Business District (CBD) are unlikely to be as serious as the market expects. He projected that the polarization phenomenon, in which transactions are concentrated on prime assets within the CBD, will continue this year.
"Looking at the CBD, the supply timeline is being gradually pushed back due to rising construction costs and uncertainty over whether sales will close after completion," Choi said in an interview with The Seoul Economic Daily on Wednesday.
His analysis is that demand in the CBD continues to hold up, and delays in supply will prevent an oversupply situation from emerging. "Newly built offices have no choice but to charge higher rents because of rising construction costs," Choi explained. "Rent is one factor in asset competitiveness, and new buildings may have a weaker comparative advantage over existing assets."
According to CBRE Korea, commercial real estate transaction volume in Seoul reached a record 33.7 trillion won last year. The surge was driven by improved borrowing conditions on the back of lower interest rates, along with active large-scale deals. Choi identified polarization as the defining feature of last year's market and forecast that this trend will continue this year.
"Only prime assets are being traded in the market, while mid-tier assets may be difficult to sell," Choi said. "But the commercial office market is in somewhat better shape because there have been large-scale capital commitments from institutional investors (LPs)." He noted that since last year, Korea Post, the Korea Federation of SMEs, and the National Pension Service have made large capital commitments to commercial offices, suggesting demand extends beyond core assets to a wider range of properties.
CBRE Korea ranked first for the seventh consecutive year in the 2025 Korea commercial real estate investment advisory category selected by MSCI Real Assets. Last year, its investment advisory transaction volume reached $5.264 billion (about 7.87 trillion won), with a market share of 25.8%. Transaction volume rose 118% from the previous year, and market share climbed 7 percentage points.
Choi attributed this performance to CBRE Korea's collaborative structure. The firm's capital markets division comprises eight departments in total. The acquisition and sale advisory teams are segmented from prime assets down to small and mid-sized assets, while the firm also provides advisory services across asset classes including hotels, data centers, and logistics centers for both domestic and overseas transactions.
"There are often projects that require drawing on all of the firm's resources depending on the situation," Choi said. "Organic collaboration is CBRE Korea's strength." He added, "If a particular asset is being converted into a hotel, the hotel team joins in, and we review the business viability across multiple areas, such as the possibility of adding a data center during the remodeling process."
