Transaction volume and value of commercial and office buildings in Seoul are continuing to rise. However, the increase in transaction value has been modest compared with the rise in transaction volume, suggesting that deals were dominated by small and mid-sized assets.
According to commercial real estate services firm RSquare on Wednesday, the number of commercial and office building transactions in Seoul reached 202 in April, with a transaction value of 1.7664 trillion won. Compared with the previous month (185 deals, 1.6725 trillion won), the transaction count rose 9.2% and the transaction value increased 5.6%. In particular, the number of transactions has grown steadily from 143 in January this year to 144 in February, 185 in March, and 202 in April.
The reason transaction value did not increase significantly despite the rise in the number of deals is that small and mid-sized asset transactions were more active than large ones. The average transaction value per deal was approximately 8.7 billion won, slightly lower than the previous month (about 9 billion won). The fact that the growth rate of transaction value (5.6%) fell below the growth rate of transaction count (9.2%) is interpreted in the same context. Compared with the same month a year earlier (196 deals, 2.5621 trillion won), the number of transactions rose by six, but transaction value declined 34.72%.
There were two deals above 100 billion won, a somewhat slower pace compared with the first quarter of this year, when three such deals were completed each month. The highest-priced transaction was the "Lotte Chilsung Beverage Yangpyeong-dong Business Site" located in Yangpyeong-dong 5-ga, Yeongdeungpo-gu, which sold for approximately 158 billion won. It was followed by the "Hana Insurance Building" in Inui-dong, Jongno-gu, which traded for 137 billion won.
"With transactions exceeding 200 in April, we confirmed a trend of expanding market participation, but the increase in transaction value was relatively modest," an official at RSquare's research center said. "The characteristic feature was that deals centered on small and mid-sized assets continued rather than large transactions."
