KB Real Estate Reveals 2026 Q2 Office Apartment Price Trends: Seoul’s Market Sees 0.39% Rise

Seoul’s office apartment prices rose 0.39% in Q2 2026, marking the first quarterly increase since mid-2025, according to KB Real Estate’s latest market report released June 28. The data, based on transactions recorded as of June 15, shows a shift from the decline seen in Q1, with large- and mid-sized units driving gains in key districts. Analysts cite pent-up demand from corporate relocations and government incentives for commercial conversions as key factors behind the rebound.

KB Real Estate’s report highlights a regional divergence in price movements. Gangnam District, home to Seoul’s most expensive office apartments, saw prices climb quarter-over-quarter, while Gangbuk’s smaller units rose just 0.18%. The average transaction price across Seoul now stands at ₩1.23 billion, up from ₩1.22 billion in Q1, with large units (100m²+) gaining—double the overall rate. Mid-sized units (60–99m²) also outperformed, rising, while compact studios (under 60m²) stagnated.

The turnaround contrasts with a broader slowdown in Seoul’s residential market, where apartment prices have fallen for six consecutive quarters. KB Real Estate’s chief analyst, Lee Ji-won, attributed the office sector’s resilience to "corporate demand for flexible workspaces" and "government-led conversions of vacant offices into mixed-use developments." The data aligns with a June 20 report from the Seoul Metropolitan Government, which projected an increase in office-to-residential conversions by 2027 to address a vacancy rate in central business districts.

Why the shift matters
The rebound in office apartment prices reflects deeper trends in Seoul’s real estate market. First, corporate landlords are increasingly opting for sale-and-leaseback deals to unlock liquidity, according to a June 20 filing by the Korea Real Estate Public Corporation. Second, the government’s "Office-to-Home" policy, launched in 2025, has accelerated conversions in districts like Yeouido and Mapo, where vacancy rates exceeded last year. KB Real Estate’s data shows these areas now account for of Seoul’s office apartment transactions, up from 25% in 2024.

Yet challenges remain. The Bank of Korea’s June monetary policy report warned of "persistent weak demand" in the commercial sector, citing high interest rates and a slowdown in foreign investment. Meanwhile, rental yields for office apartments remain below, well under the threshold that typically attracts institutional buyers. Analysts at Shinhan Investment & Securities noted in a June 25 research note that "the price recovery is fragile" without sustained corporate hiring or a shift in monetary policy.

What comes next
The next KB Real Estate report, due July 30, will track whether the upward trend holds amid rising mortgage rates. Industry observers expect regional disparities to widen, with Gangnam and southern Seoul districts likely to outperform as tech firms and financial institutions consolidate operations. The Seoul Metropolitan Government has also signaled plans to expand tax incentives for office-to-residential conversions in Q3, potentially accelerating price gains in high-vacancy zones.

For investors, the data underscores a two-speed market: while large units benefit from corporate demand and conversions, smaller apartments face headwinds from stagnant rents and high financing costs. KB Real Estate’s Lee Ji-won cautioned that "the market remains sensitive to interest rate cuts," adding that any further declines in Seoul’s residential sector could pressure office apartment valuations.

Key figures from KB Real Estate’s Q2 2026 report
• Overall Seoul office apartment price change: +0.39% QoQ (first increase since Q2 2025)
• Average transaction price: ₩1.23 billion
• Large units (100m²+): +0.39% QoQ
• Mid-sized units (60–99m²): +0.39% QoQ
• Compact studios (<60m²): +0.05% QoQ
• Gangnam District price change: +0.52% QoQ
• Gangbuk District price change: +0.18% QoQ
• Office vacancy rate (central districts): (as of June 2026)
• Projected office-to-residential conversions (2026–2027): +12% YoY

Sources
• KB Real Estate, 2026 Q2 Office Apartment Market Report (June 28, 2026)
• Seoul Metropolitan Government, Commercial Real Estate Conversion Policy Update (June 20, 2026)
• Bank of Korea, Monetary Policy Statement (June 2026)
• Shinhan Investment & Securities, Seoul Real Estate Outlook (June 25, 2026)
• Korea Real Estate Public Corporation, Sale-and-Leaseback Trends (June 20, 2026)