South Korean patrons spent $17 billion on actual property exterior of their residence area throughout 2019, making the nation Asia Pacific’s greatest cross-border property investor final yr, in accordance with knowledge supplier Actual Capital Analytics.
Pushed by workplace investments in Paris, Frankfurt and Brussels, Korean buyers final yr spent practically double the nation’s earlier report dedication to non-Asian actual property belongings of $9.6 billion set in 2017.
With buyers from mainland China constrained by tighter lending situations at residence, South Korean sources accounted for practically half of all actual property funding outflows from Asia throughout 2019, and pushed 2018 champion Singapore into second place, the property info agency’s figures present.
Hana Monetary Leads Korean Wave
South Korean buyers aimed the majority of their outgoing capital in 2019 at Europe, making a number of the continent’s highest profile offers final yr, as Asian urge for food for property within the previous world develop past the UK.
The surge in Korean property acquisitions in Europe was led by Hana Monetary Funding, which upped its European property purchases by 116 % final yr, spending a complete of €12 billion on property belongings on the continent. The shopping for spree made Hana the ninth-largest purchaser of European belongings final yr, simply behind German fund supervisor BVK. Hana’s rating marked the primary time Korean investor had positioned among the many largest property patrons in Europe, according to RCA’s numbers.
As a part of its buy final yr Seoul-based Hana accomplished the KRW 1.three trillion ($1.1 billion) buy of The Squaire office building in Frankfurt from Blackstone on the finish of 2019, including Germany’s largest workplace constructing to its portfolio.
In one other big-ticket deal, brokerage Mirae Asset Daewoo in July teamed up with French asset supervisor Amundi Actual Property for its personal workplace deal, buying the Majunga Tower in Paris for KRW 1.08 trillion ($925 million).
Business analysts indicated that Korean starvation for European property grew final yr as a consequence of a convergence of financial and financial influences.
“Because of an ideal storm of things corresponding to a beneficial foreign money change price between the Euro and the Received, comparatively low-cost European debt, the home property market in South Korea in addition to the comparatively steady political local weather in Europe have meant that capital has flowed into the European actual property market,” mentioned Tristam Larder, Savills’ co-head of regional funding advisory EMEA.
European Places of work Get Some Love
With this cocktail of things making the continent modern with Korean patrons, property acquisitions from the Asian nation grew by 122 % throughout 2019, in comparison with the earlier yr, leaping to €12.5 billion from €5.6 billion, in accordance with Savills.
By sector, South Korean buyers directed most of this money into places of work, with €eight.7 billion of their complete spending in Europe — some 70 % — going into buildings dedicated to desk area.
This choice for places of work over different lessons is more likely to keep, in accordance with RCA’s analysts.
Tom Leahy, a senior director with Actual Capital Analytics in London, advised Mingtiandi that there’s a “clear bias in direction of massive, prime workplace buildings and logistics items let to main worldwide occupiers like Amazon and we’ve seen little proof so far, past a handful of resort offers, that it will change.”
South Korean Capital Continues to Movement
Thus far in 2020 Leahy has been confirmed appropriate, with a consortium led by Seoul-based Meritz Securities in January agreeing to make the best worth buy ever of a single property in Belgium.
The South Korea-led staff, which was reported by Bloomberg to additionally embrace London-based property funding supervisor The Valesco Group and Seoul’s AIP Asset Administration, is said to have paid Dutch asset manager Breevast BV €1.4 billion ($1.6 billion) for the 36-storey Finance Tower in Brussels.
That Belgian purchase was adopted this month by a Korean-Finnish investor consortium together with NH Funding & Securities and Shinhan Funding Corp agreeing to spend €480 million to purchase Gebhardinaukio 1 in Helsinki — the biggest ever buy of workplace asset funding in Finland.
European Logistics Entice South Korean Money
With the persevering with momentum of e-commerce driving logistics demand, Europe’s warehouses took second place on South Korean buyers’ procuring lists.
Savills mentioned the logistics sector accounted for 25 % of spending by South Korean buyers in Europe throughout 2019, with the East Asian nation committing €three.1 billion to the continent’s large bins.
Simply three months in the past, Mingtiandi sources indicated that ESR’s Kendall Sq. Asset Administration had acted on behalf of Samsung Securities to acquire the largest logistics facility in the Czech Republic for €132 million.