APREA Opening New Doors for Investments in APAC: South Korea
8 December 2021Takeaways
South Korea has all the necessary ingredients to become a successful Public REIT market. Asia’s second largest developed market with high quality commercial real estate, a sophisticated domestic institutional and pension fund investor base that already understands the benefits of real estate in a diversified portfolio combined with a supportive regulatory and tax regime. While we see room for improvement especially with respect to secondary offerings, the sector is off to a good start and should rival other Asian REIT markets over time.
Amid the rapidly changing international economic environment, Korea is maintaining solid growth. Despite rising interest rates, the Korean office investment market is expected to maintain a moderate price trend in the mid- to long-term as the vacancy rate is decreasing based on limited new supplies and solid demand. In the case of the logistics sector, it is expected to establish differentiated grades and long-term profit stability for each asset according to location, size, physical conditions, and operating service level due to the burden of new supplies to be supplied in the future.
