briefing seoul office sector q4 2014 -...

savills.co.kr/research 01

BriefingSeoul office sector Q4 2014

Savills World Research Korea

Supply of new buildings pushed up

the vacancy rate in the CBD, while the

GBD and the YBD saw their vacancy

rates decline.

The CBD recorded a vacancy rate

increase but boasted the highest rent

increase with active tenant relocations.

Meanwhile, the GBD enjoyed the lowest

vacancy rate of the three districts, but

in contrast rents climbed at the slowest

pace.

“Transaction volumes increased in both the leasing and investment markets in Q4 2014 due to leasing in, and relocation to, newly-completed, prime office buildings, as well as investors showing continued interest in stabilised assets.”

Image : CBD, Seoul

In Q4, the demand for prime office

space rose in comparison with Q2 and

Q3 and the total net absorption was

207,000 sq m.

In Q4, transaction volumes

amounted to KRW 2.5 trillion, which

equalled the combined transaction

volumes of the preceding three quarters.

The total amount of hard asset deals

completed in 2014 reached KRW 5.1

trillion.

SUMMARYDespite the high vacancy rates in Yeouido and the CBD, the Seoul office market has attracted sustained interest from both domestic and international investors. This is due to low interest rates and availability of properties which are forecast to benefit from future decreases in vacancy.


Briefing | Seoul office sector Q4 2014

SupplyIn Q4/2014, two prime office buildings were completed in the CBD. In the Gwanghwamun D Tower, approximately 50% of the office area is now used by Daelim and the remaining 50% is being marketed for lease. Metro Tower, which was owned and used by GS E&C, went through remodelling from Q4/2013 after its sale. With the completion of remodelling in Q4/2014, the building is now available for lease and is being marketed to attract tenants.

Net additions to supply accounted for approximately 290,000 sq m from newly-supplied or opened prime buildings in 2014 (Autoway Tower, Gwanghwamun D Tower, Metro Tower and the demolition of Hana Bank's HQ). Prime office building supply in 2015 will be approximately 50% of that recorded in 2014. The planned prime office supply will involve three buildings (one owner-occupied building and two buildings for lease) and they will all be completed in the CBD in Q1. Olleh Plex will be used by its owner KT, which will relocate from buildings such as DongikSeongbong. In the case of Tower8 and Twin City, developed for leasing, marketing is underway to secure pre-commitments, but they are yet to attract any tenants.

Demand and vacancy rateAccording to data released by the Bank of Korea in January 2015, the economic growth rate for 2014 was provisionally recorded at 3.3% and the growth rate for 2015 is forecast to be 3.4%. This represents a downward adjustment from the projections announced in October 2014 (3.5% for 2014 and 3.9% for 2015). The consumer price index growth posted at 1.3% for 2014 and is expected to be in the 1% range in 2015 due to declining oil prices.

As of December 2014, the number of employees working in the finance and insurance sectors fell 6.1%p year-on-year (YoY) to 807,000. Thisis a continued downward trend which began in July 2013.

Net absorption in the Seoul prime office sector recorded 207,000 sq m in 2014 compared to 115,000 sq m

TABLE 1

Monthly rent and vacancy rate by district, Q4/2014

TABLE 2

New office supply, Q4/2014

Source: Savills Korea

DistrictAverage rent

(KRW per 3.3058 sq m GLA)

Average rent(KRW per 3.3058

sq m NLA)

YoY rental increase rate (%)

Net absorption (sq m)

Vacancy rate (%)

CBD 98,900 175,800 2.1 26,940 14.9

GBD 86,100 168,700 0.8 8,560 8.2

YBD 78,000 160,400 1.4 50,880 21.1

Overall Seoul Average

90,800 170,600 1.5 86,380 14.1

District Building name GFA (sq m) Floors Remarks

CBDGwanghwamun D Tower

(Cheongjin District 2 and 3)105,462 B5/F-27/F

Of the North and South Towers, Daelim uses the North Tower. Marketing is underway for

the South Tower

CBDMetro Tower

(Former GS Yeokjeon Tower)39,908 B2/F-20/F Remodelling completed

Source: Savills Korea *Net absorption of Seoul prime office buildings.

GRAPH 1

Growth rate of real GDP and real exports, 2006–2016F

Source: Bank of Korea

District Building name GFA (sq m) Floors Remarks

Q1 CBD Olleh Plex 51,120 B6/F-25/F To be used by KT as its own office

Q1 CBD Tower 8 51,752 B7/F-24/F

Q1 CBD Twin City 32,743(Office area)

B7/F~30/F(Office floors from

2/F to18/F)

Office, hotel, officetel, mixed-use retail facility, 2 buildings GFA of 91,461 sq m


TABLE 3

Office buildings planned for supply in 2015

5.2% 5.5%

2.8%0.7%

6.5%

3.7%

2.3%3.0%

3.3%3.4% 3.7%

13.4%

12.4%

6.0%

0.4%

13.5%

17.1%

4.4% 4.5%

2.1%

3.4%3.9%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015F 2016F

Economic growth (GDP, annual variance in %) Exports growth (annual variance in %)



GRAPH 4

Net absorption, Q1/2008–Q4/2014

GRAPH 3

Take-up, 2014



GRAPH 2

The number of employees in the financial and insurance sectors, Dec 2005–Dec 2014


in 2012 and 164,000 sq m in 2013, however, this is down from the average of 245,000 sq m posted in the15 years since 1998. If economic recovery is delayed further, then net absorption is likely to remain at the same level in 2015.

Prime-to-prime relocations accounted for 50% of the demand for prime office space in Q4 2014, with notable deals including Daelim and Hanwha E&C. Daelim, who were previously located in Twin Tree Tower, moved to D Tower which was completed in Q4. Hanwha E&C, whose offices were located in Center1 and the Hanwha Janggyo Building, consolidated and relocated to the FKI Tower that was completed in 2013. The move was due to the remodelling of the Hanwha Janggyo Building. Secondary-to-prime office relocations represented 19% of the total absorption for prime building, with its proportion decreasing from the previous quarter as prime-to-prime relocations ramped up.

The final quarter of 2014 saw 86,380 sq m of net absorption in prime office buildings. The CBD posted figures of 26,940 sq m, showing a quarter-on-quarter (QoQ) increase in demand as Hana-KEB’s Task Force Team was established in Seoul Square. Despite this, the CBD saw its vacancy rate increase by 3.6%p to 14.9% due to vacancy in the newly completed D Tower and Metro Tower. In the GBD, net absorption was 8,560 sq m and the vacancy rate decreased by 0.5%p to 8.2%. The demand increase in the GBD was mainly attributable to office expansion by POSCO affiliates.

The YBD recorded a net absorption of 50,880 sq m, thanks to Hanwha E&C's relocation from the CBD and secondary-to-prime relocations by AIG, the Korea Teachers’ Credit Union and Pantech. As a result, the vacancy rate in the office district dropped 3.9%p to 21.1%.

OutlookIn Q1, in CBD, many tenants’ relocation is planned. SBI Savings Bank is move in to Center 1 and Daewoo International (to NEAT Tower) and Ssangyong affiliates(to City Center) are relocating to their own buildings which were recently completed. Also, Mercedes Benz Korea recently renewed their current

680

700

720

740

760

780

800

820

840

860

880

900

920

Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14

No.

em

plo

yed

('00

0)

-200,000

-150,000

-100,000

-50,000

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2008 2009 2010 2011 2012 2013 2014

sq m

CBD GBD YBD

Prime to prime50%

Secondary to prime

19%

Expansion15%

New organisation

16%

Q4

Prime to prime33%

Secondary to prime

31%

Expansion21%

New organisation

15%

Q1 - Q4



TABLE 4

Major tenant relocations, Q4/2014

District Previous building Tenant District Current buildingArea

(sq m)

CBD

Twin Tree Tower Daelim CBD D Tower 13,180

Center 1/HanwhaJanggyo Building Hanwha E&C YBD FKI Tower 29,000

Hanwha Janggyo Building Hanwha L&C CBD Center 1 8,400

New organisation Hana Bank/ Korea Exchange Bank TFT CBD Seoul Square 23,500

Korea Trade Insurance Corporation AIG YBD Two IFC 7,100

Baejae Jeongdong Building Pantech C&I YBD HP 5,800

GBD

Expansion Posco GBD Posco Building 7,100

Capital Tower Kyobo Life Insurance GBD SI Tower 5,500

Expansion Samsung C&T Corporation GBD Platinum Tower 2,300

YBD The Korean Teachers' Credit Union Building

The Korean Teachers' Credit Union YBD 63 Building 11,500


lease with Seoul Square for expanded office space with long term lease.

In Q1/2015, the CBD will see three new prime office buildings erected (one owner-occupied building and two office buildings for lease).Olleh Plex (51,120 sq m) will be occupied by its owner KT as its divisions relocate from Gangnam. KT will combine various offices that are currently scattered throughout Gangnam and Gangbuk, relocating them to KT Gwanghwamun West Tower (existing building) and East Tower (Olleh Plex). The relocations are part of the company's strategy to enhance business efficiency and improve cohesion between its business units. Twin City (Dongja District 8) and Tower 8 (Cheongjin District 8), which were developed for the open leasing market, have yet to secure new tenants and are likely to cause a 2 to 2.5%p increase in the CBD's vacancy rate.

In the GBD, the transfer of title for the former KEPCO HQ site is due to be completed by Q3, but KEPCO has already vacated the building, having moved to Naju in November 2014, leaving most of the office area vacant. The Hyundai Motor Group has announced its plan to move a number of its affiliates to the building starting from Q1/2015 to increase efficiency and boost company performance. It is known that Hyundai Mobis, Hyundai Power Tech, Hyundai WIA, Dongbu Special Steel and Hyundai Engineering are preparing to relocate their headquarters or parts of their organisations. The automobile group is reported to be making preparations for the effective management of properties and office buildings owned by its affiliates, with the development of a Global Business Centre that includes an asset management department of Hyundai Engineering. Divisions of Samsung Electronics are slated for relocation within the office district, moving out from the Hanwha Life Insurance Seocho Building to a new home in the Samsung Group's office building. As a result, the GBD is expected to post a hike in vacancy in Q1 2015.

In the YBD, the vacancy rate is likely to slide down by a further 3%p with IBM preparing to leave the Military Mutual Aid Association Building (a secondary building) in Gangnam to occupy already-leased space in Three IFC. The YBD is showing a

GRAPH 5

Seoul prime office vacancy rate, Q1/2002–Q4/2014


GRAPH 6

Seoul prime office rental indices, Q1/2000–Q4/2014


40

60

80

100

120

140

160

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Q1/

2001

= 1

00

CBD GBD YBD

IncludingThree IFC

21.1%

ExcludingThree IFC

10.1%

0%

5%

10%

15%

20%

25%

30%

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

CBD GBD YBD YBD (excluding Three IFC)



GRAPH 7

YoY rental increase rate by district, Q1/2008–Q4/2014

Source: Savills Korea, Bank of Korea

downward trend in average vacancy rate, as Two IFC has lowered its vacancy to sub 10% and the FKI Tower to approximately 25%. Newly-supplied office buildings, which were the major cause for the vacancy increase, are filling up through the relocation of tenants from other office districts. With no office buildings to be supplied until 2016, the vacancy rate in the area is expected to stabilise.

Rent ratesOut of a basket of 96 prime office buildings located in Seoul, two (one in the CBD and one in the GBD) raised rents in Q4/2014. In the CBD, the rental increase rate rose by 2.1%, posting the highest YoY increase of all office districts, followed by 1.4% in the YBD and 0.8% in the GBD.The city-wideaverage YoY rental increase rate was 1.5%, outpacing the consumer price increase rate (1.0%), and maintenance fees increased by 2.2% from the same period last year. In Q4 by office district, the YoY maintenance fee increase rate was 2.1% in the CBD, 2.4% in the GBD and 2.5% in the YBD.

OutlookAccording to our surveys, four CBD buildings plan to raise rents in Q1/2015. However, the rent increase rate in 2015 is not expected to surpass the increase rate recorded in 2014 due to the continued disparity between marketing rents and effective rents (net of rent free and tenant improvement), which is underpinned by offers from office buildings whose tenants will relocate to new buildings or areas outside Seoul, resulting in large vacancies. Additionally, low consumer price index growth, led by low oil prices, will also keep rent and maintenance fee increase rates at similar levels to 2014.

Transactions and Investment marketIn Q4, 15 buildings, including seven prime office buildings, changed hands. Total transaction volumes were KRW 2.5 trillion, which is similarto figures posted in Q1-Q3. Transactions for a number of office buildings that were delayed were finally concluded at year-end. Total office building transactions for 2014 amounted to KRW 5.1 trillion. As a result, transaction volumes for hard

GRAPH 8

Seoul office transaction volumes, Q1/2007–Q4/2014


-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2008 2009 2010 2011 2012 2013 2014

CBD GBD YBD CPI growth rate

0

1

2

3

4

5

6

2007 2008 2009 2010 2011 2012 2013 2014

KR

W (t

rillio

n)

Q1 Q2 Q3 Q4

GRAPH 9

Prime office building cap rate trends, Q1/2005–Q4/2014

Source: Savills Korea, Bank of Korea

0

100

200

300

400

500

600

700

800

900

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Spread (RHS) Cap rate (LHS) Five-year treasury bond yield (LHS)



asset deals have amounted to KRW 5 trillion or more per annum for three consecutive years.

The Seoul prime office market saw vacancy rates remain high due to accumulated new supply of premises. Despite this, demand from both domestic and foreign investors for these assets remained strong. The relative safety of the asset class continues to be the preferred investment selection, attracting abundant liquidity from investors who continue to increase alternative asset allocations within their portfolios and take advantage of low interest rates. Additionally, removal of the reduction on acquisition tax for real estate funds as of 1 January 2015, has contributed to increased transaction activity within the closing months of 2014. Foreign investment into domestic office buildings was also strong, with one such transaction in the CBD setting a new record per-pyeong price.

Domestic institutional investors, who are under great pressure for the regular payment of dividends to investors, continue to show an ingrained preference for office buildings with a low vacancy rate and stable tenant base.They were involved in heated competition for the acquisition of buildings matching this profile. Meanwhile, foreign investors, who attach significant importance to IRR levels and capital gains upon resale, were aggressive in investing in relatively undervalued or well-located buildings, even in cases involving high vacancy.

the GFA) changed hands to Vestas Investment Management for KRW 185 billion (KRW 18.7 million per pyeong); the remainder of the building consists of strata-title retail facilities. In spite of the strata-title ownership, the building attracted interest from investors due to strong covenant anchor tenants such as Samsung Fire & Marine and Samsung Life Insurance, as well as the 100% occupancy rate.

Olive Tower, which was owned by Midas Asset Management, was sold to Deutsche Asset & Wealth Management, despite half of the space being vacant after the recent relocation of the anchor tenant. The investors of YG Tower and Olive Tower are known to be foreign funds.

In the GBD, one prime and three secondary office buildings found new owners. Autoway Tower (with a GFA of 47,721 sq m) was completed by SK Networks in Q1/2014 for its own office use, but 60% of the office section of the building is now leased out to Hyundai Motors and Hyundai Auto Ever. Google Campus is planning to establish itself in the basement of the property at the beginning of 2015. IGIS Asset Management bought the building for KRW 309 billion (KRW 21.4 million per pyeong), with 100% financing from the Korean Teachers' Credit Union.

In the YBD, transactions for one prime and one secondary office building were concluded. The Korea Local Administration Officials' Mutual

In the CBD, transactions were executed for five prime buildings, including State Tower Namsan, Jeongdong Building, Olive Tower, YG Tower, YTN Tower and Tongyang Life Insurance's owner-occupied secondary office building. State Tower Namsan changed hands from Shinhan BNPP to CBRE GI's real estate fund for KRW 503 billion. The building (with a GFA of 66,799 sq m) was completed in 2011 and is fully leased to multiple international and creditworthy tenants. The 100% occupancy rate resulted in significant value appreciation. The ultimate investor of State Tower Namsan is a foreign sovereign wealth fund and the building fetched KRW 24.9 million per pyeong, setting a new record for prime office building prices in the CBD.

Jeongdong Building (with a GFA of 39,343 sq m), which was owned by SRA Asset Management, was acquired by IGIS Asset Management for KRW 277.5 billion (KRW 23.3 million per pyeong). The building, remodelled and expanded in 2010, is located slightly off from the core office area, but is preferred by tenants due to its tranquil and historic surroundings. Currently, the building has no vacancy and more than 80% of the office area is occupied by two tenants-one of Korea's top law firms, Kim & Chang, and the Korea Institute for Curriculum and Evaluation.

The office portion of YG Tower (32,718 sq m, accounting for 77% of

District Property Seller BuyerTransacted area

(sq m)Transaction price

(KRW bil)

CBD State Tower Namsan Shinhan BNPP Asset Management CBRE Global Investors 66,799 503.0

CBD Jeong-Dong Building Samsung SRA AMC IGIS AMC 39,343 277.5

CBD YTN Tower YTN KB Real Estate Trust 42,322 231.0

CBD Olive Tower Midas Asset AMC Deutsche Asset & Wealth Management 59,500 347.0

CBD YG Tower Consus AMC Vestas AMC 32,718 185.0

GBD Autoway Tower SK networks Igis AMC 47,721 309.0

GBD HLMC Building HLMC KT AMC 15,183 92.0

YBD POBA Yeouido Building Public Officials Benefit Association KB AMC 40,440 203.9

YBD Samwhan Camus Building Samwhan Camus Taeheung Industry LTD 27,268 92.0

TABLE 5

Major investment transactions, 4Q/2014




JoAnn HongDirectorKorea+82 2 2124 [email protected]

Savills Korea

Please contact us for further information

Savills plcSavills is a leading global real estate service provider listed on the London Stock Exchange. The company established in 1855, has a rich heritage with unrivalled growth. It is a company that leads rather than follows, and now has over 600 offices and associates throughout the Americas, Europe, Asia Pacific, Africa and the Middle East.

This report is for general informative purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. Whilst every effort has been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form is prohibited without written permission from Savills Research.

Savills Research

Simon SmithSenior DirectorAsia Pacific+852 2842 [email protected]

Seunghan LeeDirector, Leasing &Marketing, Development Sales+82 2 2124 [email protected]

Sue LeeDirectorTenant Rep.+82 2 2124 [email protected]

Youngtaek KimVice PresidentKorea+82 2 2124 [email protected]

K.D. JeonHead of KoreaKorea+82 2 2124 [email protected]

Crystal LeeSenior DirectorInvestment Advisory+82 2 2124 [email protected]

Hyosung KimSenior DirectorKorea+82 2 2124 [email protected]

Grace KoDirectorCRES Leasing Service+82 2 2124 [email protected]

Fund sold Eugene Investment & Securities Building (with a GFA of 40,440 sq m) to KB Asset Management for KRW 203.9 billion (KRW 16.7 million per pyeong).The Korea Electronic Power Corporation (Kepco) site, when sold last September, fetched KRW 10.55 trillion, which is the largest amount ever for a single property transaction in Korea. Kepco's office building was vacated when the company relocated to Naju at the end of November in order to revitalise retail trade in the surrounding areas; Hyundai Motor Group is known to be considering relocating a number of its affiliates to the building. The automobile company announced its development plan for a mixed-use complex, featuring a hotel, exhibition hall and commercial facilities, as well as its own 'Global Business Centre' named HQ.

The benchmark interest rate has remained at 2% since the Bank of Korea lowered the rate by 25bps last October. With the low benchmark interest rate, interest rates on loans have also maintained low levels. The average yield of the five-year

GRAPH 10

Five-year goverment bond yield and benchmark interest rate trends, Jan 2012–Dec 2014


1.8%

2.0%

2.3%

2.5%

2.8%

3.0%

3.3%

3.5%

3.8%

4.0%

2012

/01/

02

2012

/02/

16

2012

/04/

02

2012

/05/

17

2012

/07/

03

2012

/08/

16

2012

/09/

28

2012

/11/

14

2012

/12/

31

2013

/02/

14

2013

/04/

01

2013

/05/

15

2013

/07/

01

2013

/08/

14

2013

/10/

02

2013

/11/

18

2014

/01/

02

2014

/02/

18

2014

/04/

02

2014

/05/

20

2014

/07/

04

2014

/08/

19

2014

/10/

07

2014

/11/

17

2014

/12/

31

Five-year treasury bond yield Benchmark rate

government bond hit a record low of 2.4% in Q4. The average cap rate of prime office buildings slipped, but the spread with the five-year government bond is at the 300bp level. In fact, considering low rental increase rates, long rent-free period

and tenant improvement allowances, offered to combat high vacancy rates, the gap between the market yield and effective yields is believed to have widened significantly. Further cap rate compression is foreseeing once leasing market is stabilised.



AppendixOverview of the Seoul office market and Savills Korea office survey

Close to 67% of large office buildings (30,000 sq m or more) in Seoul are located in three major business districts – the CBD (32.3%), GBD (20.7%) and YBD (14.0%). The CBD is the largest of these districts and is home to major government and multinational institutions. GBD also houses many multinational companies and is an information technology centre, while YBD, the "Wall Street" of South Korea, includes the headquarters of major securities firms and broadcasting companies.

The Savills Korea Quarterly Office survey is the longest running survey

TABLE 6

Summary of surveyed buildings, Dec 2014

Source: Savills Research & Consultancy

of prime office stock in Seoul. Established in 1997, it currently comprises 96 of the 122 buildings in Seoul classified as "prime" buildings.

Prime buildings: Buildings with a GFA greater than 30,000 sq m with good accessibility and facilities, a high level of finish, and creditworthy blue-chip tenants.

Monthly rent: Surveyed rents are "face rents", the asking rents reported by landlords for mid-level floors. These rents are standardised by Savills Korea to account for variations in the security deposits

CBD GBD YBD Total

A

Number of buildings 23 14 8 45

Average GFA (sq m) 83,182 96,231 103,691 90,888

Average year of completion 2002 1999 2002 2001

B

Number of buildings 23 18 10 51

Average GFA (sq m) 51,352 39,783 49,218 46,858

Average year of completion 1999 2000 1996 2000

Total number of buildings 46 32 18 96

Total area (sq m) 3,094,282 2,063,331 1,321,707 6,479,728

required by different landlords to produce an effective rental figure for NLA.

Cap rate calculation methodCap rate: (income from interest on security deposit (5%) + face rent of a standard floor + residual income from maintenance fee) × occupancy rate (95%) × 12 / transaction amount

For comparison of cap rates of each transaction case, a 5% interest rate on security deposit and 95% occupancy rate were uniformly applied.

briefing seoul office sector q4 2014 -...

Documents