Both the transaction volume and amounts for South Korea’s knowledge industry centers slid downwards in the third quarter of 2023.

According to an analysis by big data and commercial real estate specialist company RealtyPlanet Co. on Tuesday, the number of transactions for knowledge industry centers nationwide in the third quarter was 860, or a 15 percent decrease compared to the previous quarter.

The number of transactions for knowledge industry centers was 746 in the fourth quarter of 2022, the lowest since 2020, but it had shown signs of a rebound in the first and second quarters of this year before trending downwards again in the third quarter.

The transaction amount in the third quarter decreased by 12 percent compared to the previous quarter, amounting to 371.5 billion won ($285 million). The transaction amount, which also recorded its lowest level since 2020 at 287.1 billion won in the fourth quarter last year, had shown signs of recovery until the second quarter of this year but turned downward again.

Compared to the same period in 2022, the transaction volume and amount in the third quarter of this year decreased by 16.3 percent and 15.7 percent respectively. The price per 3.3 square meters of knowledge industry centers also dropped by 2.5 percent compared to the second quarter to hit 16.35 million won.

The downtrend was visible in both metropolitan and non-metropolitan areas, with the transaction volume in the metropolitan area decreasing by 15.1 percent to 764 in the third quarter, and the transaction amount decreasing by 11 percent to 343.8 billion won compared to the previous quarter.

In non-metropolitan areas, the transaction volume decreased by 14.3 percent to 96 and the transaction amount fell by 22.8 percent to 27.6 billion won. The price per 3.3 square meters in the metropolitan area was 17.13 million won, a 0.7 percent decrease, remaining relatively stable, while plummeting by 21.5 percent to 10.1 million won in non-metropolitan areas.

Breaking down the numbers for the metropolitan region, the transaction volume for knowledge industry centers in Seoul decreased by 5.8 percent to 180 in the third quarter. The transaction amount decreased by 14.1 percent to 129 billion won, and the price per 3.3 square meters also dropped by 7 percent to 26.18 million won.

In Gyeonggi Province, the transaction volume decreased by 15.6 percent to 518 and the transaction amount decreased by 8.6 percent to 192.7 billion won in the third quarter. The price per 3.3 square meters was 14.68 million won, a 0.3 percent decrease, remaining steady.

“The supply-demand imbalance for knowledge industry centers has worsened due to a decrease in demand from major tenants and steady supply growth,” a representative from RealtyPlanet said, predicting that the fall in prices will continue as lease income decreases due to interest rate hikes and other factors.

By Pulse

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