Region’s property investors get a glimpse of Korea’s hottest properties being displayed at the Global Cityscape 2016, which will conclude today.
“The two Korean free zones Incheon and Busan are participating in the three-day exhibition to showcase new property projects in Korea,” said Yong Suk Kwon, regional president Middle East and North Africa of Trade and Investment Promotion Office (Kotra).
Korea has long been focused on the UAE and GCC to attract investments into the second biggest Asian economy. In recent years, Korean real estate projects have done well in attracting foreign direct investment.
“South Korea scored a total return rate of 7.1 per cent in 2015. It is a high and competitive return rate compared to other Asian countries. The returns are much higher than China (5.7 per cent) and Singapore (6.2 per cent), said Kwon.
He said foreign investment companies including the State Oil Fund of Azerbaijan (SOFAZ), Abu Dhabi Investment Authority (ADIA), Kohlberg Kravis Roberts (KKR), ARA Asset Management Limited and Blackstone, have entered South Korea’s office building market.
Referring to CBRE’s 2016 research, he said Korea secured 39 per cent of investors’ interest in most attractive countries to invest. “The hottest sectors were offices with 39 per cent, multifamily/leased residential units 26 per cent and shopping centres 17 per cent,” Kwon said, adding that investments also went into storages and infrastructure.
Korea’s retail market is showing solid growth at 2.4 per cent in 2015 at $246 billion. Online shopping market showed the biggest growth with 14.3 per cent fuelled by the expansion of e-commerce and payments from mobile phone or mobile commerce. Complex shopping malls are showing robust growth displacing department stores and consolidating smaller forms of retail stores.
“South Korea is seeing a record-breaking foreign direct investment influx,” Kwon said. In 2015, Korea received $20.3 billion in FDI, the largest amount till date. And in the first half of 2016, about $10.5 billion worth FDI was invested in Korea, also breaking the previous record so far.
The government of South Korea designated so called “Korean Free Economic Zones” to improve the business and living environment for foreign-invested firms in Korea, Kwon said.