November 19, 2020 11:49
Korean pension funds, insurers and listed companies have a huge appetite for commercial real estate in the U.S.
The Wall Street Journal on Tuesday reported that Korean investors snapped up US$1.56 billion worth of commercial real estate there in the first nine months of this year, up 26 percent on-year.
Koreans accounted for 8.6 percent of foreigners investing in U.S. commercial real estate, coming third after Canadians and Germans. Last year they ranked 10th.
Chinese investment has declined sharply in the last few years due to tougher financial curbs, and other foreign companies also cut back in the coronavirus epidemic. But Korean investors "are emerging as some of the most-aggressive buyers of U.S. commercial real estate during the COVID-19 period," the daily said.
There are some concerns that Korean investment in foreign commercial property is overheating. Park Hae-sik at the Korea Institute of Finance said, "Commercial real estate is especially vulnerable to the impact of the epidemic and if it continues the risk of losses is great."
Pyun Deuk-hyun at NH Investment and Securities said, "As telecommuting becomes more prevalent due to the pandemic, the value of commercial property in urban areas as well as private homes is expected to drop, which calls for caution in investments. If the won keeps rising at this rate, foreign-exchange losses from rents could mount as well."
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