Global property investment by South Korean investors has risen 900% year-on-year, with a particular surge in the European market, says Jones Lang LaSalle.
Global property investment by South Korean investors has risen 900% year-on-year, with a particular surge in the European market, says Jones Lang LaSalle.
The first six months of 2013 saw a record $5 bn (€3.8 bn) of offshore property investment from South Korea, a significant increase on the $500 mln (€380 mln) registered in H1 2012.
The JLL report predicts that this capital flow could be as high as $10 bn (€7.6 bn) across 2013 as a whole, with transactions spread across all the major global property markets.
The South Korean transactions have not been confined to any one market but all share several particular requirements. The report says that these investors typically seek net yields of between 6% and 7%, a holding period of around five years and core assets in prime locations requiring little additional capital expenditure.
Major cross-border European deals recorded in H1 2013 include the $716 mln (€545 mln) purchase of London’s Ropemaker Place office tower and Samsung Asset Management’s £145 mln (€170 mln) purchase of 30 Crown Place in the City of London.
JLL head of international capital (Europe) Matt Richards believes the surge in investment will continue. ‘The steady flow of South Korean institutional capital into European real estate that started in 2009 has increased dramatically,’ he said.
‘This trend will continue as long as they can access yields of 6% to 7% from purchasing core assets in prime locations.’
