More Canadian investors are betting on the Korean real estate market

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South Korea is the fastest growing real estate investment destination for Canadian investors in the Asia-Pacific region, according to data on Wednesday.

Real Capital Analytics reported that real estate transactions by Canadian investors in Korea from 2016 to 2020, excluding transactions worth less than $ 10 million, totaled $ 3.5 billion. This figure was 12.4 times higher than in the previous five-year period from 2011 to 2015, which indicates the sharpest upward trend of any country in the Asia-Pacific region.

Korea has overtaken India, which grew sevenfold to $ 5 billion in deal volume between 2016 and 2020 from the previous five years. In China, which was the third fastest growing, real estate transactions reached $ 3 billion from 2016 to 2020, double the 2011-2015 period.

The sudden result was linked to the 2016 acquisition of Brookfield Asset Management of the Toronto International Financial Center in the Yoido financial district of Seoul for $ 2.2 billion. Pension fund manager CPP Investment Board was another Canadian institution present in the Korean real estate market, data from Real Capital Analytics showed.

This is in line with the growing presence of Canadian investors in the Asia Pacific commercial real estate market. The total volume of transactions in the Asia-Pacific region from 2016 to 2020 was $ 21.2 billion, more than 30 percent more than in the previous five years. The total transaction volume of Canadians in Korea was 16.4 percent in the 2016-2020 period, up from 1.73 percent in the 2011-2015 period.

Real Capital Analytics reported that over the past decade, an increasing number of Canadian institutional investors have turned their attention not only to North America, but also to the countries of the Asia-Pacific region.

Australian real estate purchases by Canadian investors halved between 2016 and 2020 from the previous five years, while their transactions in other Asia-Pacific countries, including China, India, Japan, Korea and Hong Kong, declined in an uptrend.

“More Canadian investors are opening new offices or expanding local teams in the Asia region to capitalize on investment opportunities in the rapidly growing countries here,” said Benjamin Chow, head of analytics, Asia Pacific, Real Capital Analytics.

“As a result, both the pool of active Canadian players in the region and their bargaining ability and appetite have grown significantly,” said Chow.

“Having more people on the ground and a broader range of goals ensured that momentum continued even throughout the pandemic.”

Real Capital Analytics, Brookfield, Manulife Financial, CPP Investment Board, Ontario Municipal Employees’ Pension System and BentallGreenOak ranked among the top five Canadian investors in Asia Pacific from 2016-2020.

Song Ji Hyun (consnow@heraldcorp.com)



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