Publications

- November 1, 2016: Vol. 8, No 10

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Transformative years: Change and opportunity in the Korean real estate market

by Steven Cha

The real estate market in South Korea is undergoing a vast transformation in ownership, investment and usage, leading to compelling opportunities that were not historically available for real estate investors. But it is important investors understand the market fundamentals that have historically affected the nation’s real estate sector. Over the past four decades, commercial and residential real estate have been shaped by rapid industrialisation and growth in South Korea. While the country’s trillion-dollar economy has swelled to be the 13th largest in the world, however, South Korea’s real estate market has not matured at a commensurate rate.

Prior to 1997, South Korean conglomerates (eg, the chaebols) were the primary owners of commercial real estate. These conglomerates were dependent on bank loans for financing and, as a result, typically provided real estate as collateral for loans and to support expansion. Rapidly growing conglomerates, such as Samsung G

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