A few months ago, we told how South Korean investors were responsible for 10% of cross-border property sales in Europe.
Now, news has emerged of South Korean commercial property investment in Europe more than doubled in 2019.
In fact, European property investment by South Koreans rose 122% year-on-year in 2019 to €12.5billion, up from just €5.6billon a year earlier. That is according to the latest data from international real estate agency Savills.
More than one-third (36%), the highest total, was spent on property in France – which saw a huge leap in focus. In 2018, South Korean investors spent just €355million on French property. A year later and that total was €4.5billion.
Second with 16% is Germany, which picked up €1.9billion in 2019, a third more than in 2018, says Savills.
The UK was third, but its total spend dropped €0.6billion to €1.6billion.
Major deals by South Korean investors
Among major deals was Samsung Securities’ purchase of the Lumière building in Paris as part of a joint venture with Primonial for a record €1.2billion. Other noticeable purchases were the EDGE office redevelopment, Amsterdam, which is due to be finished in 2021, but was funded in advance by Hana Financial Investment and NH Securities. In Spain, Vestas Investment Management acquired an Amazon warehouse near Barcelona airport for €200million.
The office sector attracted 70% of total 2019 investment (€8.7billion) from South Korean investors and the industrial sector 25% (€3.1billon).
Tristam Larder, Co-Head of Regional Investment Advisory EMEA, Savills, says, “Thanks to a perfect storm of factors such as a favourable currency exchange rate between the Euro and the Won, relatively cheap European debt, the domestic property market in South Korea as well as the relatively stable political climate in Europe have meant that capital has flowed into the European real estate market.”
Mike Barnes, Associate, European Research, Savills, says South Korea investors will continue to target European commercial real estate. “As we move into a new year the European Central Bank’s predictions that interest rates are more likely to fall than rise, will continue to provide an attractive lending environment. As a result, we expect South Korean capital to be a powerful force in European real estate throughout the next 12 months – particularly in core and core plus opportunities.”