AI is reshaping Seoul office demand and quality preferences

While concerns that artificial intelligence will reduce office demand persist, recent market data reveals a more complex reality. The prevailing concern is that AI-driven automation could reduce white-collar employment and office space requirements. Yet, Seoul’s Grade A office market lacks evidence of this impact. While the vacancy rate increased to 6.6% in 2Q26, this increase resulted entirely from the completion of two fully vacant office buildings, Rene Square and G1 Seoul, rather than weakening demand. Prior to these completions, vacancy had consistently remained below the natural vacancy rate of approximately 5%. This highlights the market’s healthy leasing conditions despite concerns over AI’s potential impact.

Figure 1: Vacancy rate for Grade A offices in Seoul

Source: JLL

To date, the AI sector’s direct contribution to Seoul’s Grade A leasing market remains limited. Many domestic AI startups, including Wrtn Technologies, Affinit, Lunit and Rebellions, have established offices in flexible workspaces or Grade B office buildings across areas such as Gangnam, Bundang and Itaewon. Meanwhile, several global AI firms, including OpenAI, currently operate from serviced office space in Korea. Major domestic technology companies such as Naver and Kakao also occupy owner-occupied headquarters, limiting the AI sector’s visibility in the Grade A office leasing market.

Nevertheless, recent leasing transactions indicate that AI-related demand is gradually emerging. The occupiers include AI developers such as AITRICS and Konan Tech AI Lab, as well as technology infrastructure providers including Snowflake and Equinix. While these transactions remain limited relative to the overall market, they suggest that the expanding AI ecosystem is beginning to generate incremental leasing demand.

Over time, AI is more likely to reshape occupier preferences than reduce overall office demand. In leading AI markets such as San Francisco, AI companies have become an increasingly important source of office demand. Leasing activity concentrates in high-quality office buildings and established innovation districts. This reflects the importance of locating near skilled talent, business partners and innovation ecosystems as AI companies continue to scale. While Seoul’s AI office market remains at an earlier stage, the continued growth of its AI ecosystem will reinforce the existing flight-to-quality trend over the longer term.