The total volume of office investments in major districts of the Greater Seoul area hit yet another record in 2020 despite the pandemic, as high demand for offices in prime locations led the bullish market, data showed Friday.

The full-year transaction total of offices last year in Seoul and the neighboring city of Bundang, Gyeonggi Province, came to 13.4 trillion won ($12.1 billion), up 9 percent from the previous all-time high in 2019, according to data suggested by commercial real estate services firm Cushman & Wakefield Korea.

The boom has been driven by investor appetite for relatively stable real estate assets, against the backdrop of the COVID-19 crisis and ample liquidity, wrote Philip Jin, head of research at Cushman & Wakefield Korea.

“The blow to the real economy from COVID-19 has raised concerns over the profitability of assets more closely related to the consumer economy, such as hyper markets, hotels and cinemas, in turn intensifying competition for core office assets offering relatively stable profits,” Jin wrote.

As the first wave of COVID-19 ebbed away in the first half of 2020, office investment activity picked up speed in the Greater Seoul area. Transactions in the second half of 2020 took up 65 percent of the total, the data showed.

Competition to buy prime office assets in Seoul’s major business districts began to intensify as foreign investors searched for stable income and domestic investors faced restrictions in outbound investments due to the pandemic.

Pine Avenue A, a prime office building in Seoul’s central business district, set a new record in unit price at 7.9 million won per square meter. The building, owned by Azerbaijani sovereign wealth fund SOFAZ, was sold to Shinhan Card for 521.5 billion won in the third quarter of 2020.

Parc One Tower 2 in Yeouido was the most expensive building in 2020 as NH Investment & Securities purchased it for 1 trillion won in the fourth quarter.

Other major prime office deals include Mastern Investment Management’s acquisition of D-Tower Donuimun for 656.3 billion won, Pinetree Asset Management‘s 939.9 billion-won purchase of SG Tower and Igis Asset Management’s acquisition of Namsan Square building for 500 billion won.

The competition for Seoul’s commercial real estate assets is likely to remain heated in 2021. According to a survey by real estate service firm CBRE, Seoul was ranked the third most preferred city for cross-border investment for Asia-Pacific property investors in 2021, following Tokyo and Singapore. Seoul went up by three notches from 2020. The same city did not make it to the top 10 in 2019.

By Son Ji-hyoung (consnow@heraldcorp.com)