Real Capital Analytics data showed Korean investors spending a total of $17bn outside the Asia Pacific region, almost double their previous high in 2017.

JoAnn Hong, head of research at Savills Korea, says: “We have several large pension funds, including National Pension Service, the third largest pension fund in the world. However the supply of investment-grade assets in the domestic market is limited because corporate owner-occupiers own a large share of Seoul’s investment-grade office stock. Also, more Korean institutional investors are turning to real estate, which adds to the domestic competition and prompts Korean investors to look further afield.

“Additionally, transactions in certain regions produce a positive carry: the exchange rate between the Euro and the Won is favourable, which made Europe a popular destination in 2019.”

NPS was an early mover into international real estate, followed by insurance funds, asset management companies and securities companies. RCA has recorded 22 South Korea-based investors who have spent more than $1 billion in the global real estate markets in the last five years.

The increase by South Korean players bucks the general trend in 2019 when overall global cross-border activity slowed and investors moved their focus closer to home. “The other major capital exporters from Asia all scaled back their outflows into Europe, while Chinese flows outside of Asia collapsed to their lowest levels in a decade,” says RCA’s Ben Chow.

Further reading:
Savills Korea Investment

Contact us:
JoAnn Hong