Perspectives on South Korean Overseas Investments
Overseas Real Estate is an Area of High Demand
•
Korean investors have favored longer term investment assets with consistent and
stable return due to the volatility in their stock market.
Total Investment into Real Estate Related Funds ($MM)
$700
Investment into overseas real estate deals from South Korea has shown a consistent
trend with annual growth of $9bn, starting from $12bn in 2015 to $38bn at the start
of 2019.
Korean capital in European real estate exceeded $8.3bn in 2018 and has outpaced
the demand in U.S. real estate.
$600
$500
$400
$300
$200
$100
$-
•
Interest rate differential between South Korea and EU has created attractive swap
rates, where USD/KRW swap rate is at a discount.
2010
2011
2012
2013
2014
2015
2016
2017
2018
Total Investment into Real Estate Related Funds
•
The swap rate premium + higher cap rate on EU properties has been the driving
factor for heightened interest in EU real estate investment.
Total Investment Dollars
(billions)
☑
South Korean investors have secured 10% of cross-border CRE sales in Europe.
Real estate
$60
$50
$40
$30
$20
$10
Overseas Investment Allocations
$-
Securities
Derivatives
Real Estate
Special Assets
Multi Assets
Fund Classifications
DARC
MATTER
Sources: Korea Financial Investment Association (KOFIA)
Investment in Overseas Real Estate Deals ($Bn)
$40
$35
$30
remains a
$25
large portion
$20
of total
$15
overseas
$10
investment
$5
allocations
$-
2015
2016
2017
2018
2019
Investment in Real Estate Overseas
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