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More Canadian investors betting on Korean real estate market

A night view of Yeouido, Seoul (123rf)
A night view of Yeouido, Seoul (123rf)
South Korea is the fastest-growing property investment destination for Canadian investors among the Asia-Pacific countries, data showed Wednesday.

Canadian investors’ real estate transactions in Korea from 2016 to 2020, excluding deals smaller than $10 million, came to $3.5 billion, according to data from market intelligence firm Real Capital Analytics. The figure was 12.4 times higher than it was during the previous five-year period, from 2011 to 2015, showing the sharpest uptrend among all Asia-Pacific countries.

Korea outpaced India, whose deal activities between 2016 and 2020 jumped seven times to $5 billion, compared with the previous five years. China, which was the third-fastest, saw its real estate transactions from 2016 to 2020 reach $3 billion, up twofold from the 2011-2015 period.

The sudden upshot was attributable to Toronto-based Brookfield Asset Management’s $2.2 billion acquisition of the International Finance Center in Seoul’s Yeouido financial district in 2016. Pension fund manager the CPP Investment Board was another Canadian institution present in Korea’s real estate market, Real Capital Analytics data showed.

This is in line with Canadian investors’ growing presence in the Asia-Pacific commercial real estate market. The total deal activities in the Asia-Pacific region from 2016 to 2020 amounted to $21.2 billion, up over 30 percent from the previous five years. Canadians’ total transactions in Korea accounted for 16.4 percent during the 2016-2020 period, up from 1.73 percent during the 2011-2015 period.

Real Capital Analytics said more Canadian institutional investors have looked beyond North America, toward the Asia-Pacific countries, over the past decade.

Canadian investors’ purchase of Australian real estate shrank by half in the 2016-2020 period from the previous five years, whereas their deal activities in other Asia-Pacific countries -- including China, India, Japan, Korea and Hong Kong -- saw an uptrend.

More Canadian investors either opened new offices or expanded local teams in the Asian region, to capitalize on the investment opportunities in the rapidly developing economies here, said Benjamin Chow, head of analytics for Asia-Pacific at Real Capital Analytics.

“As a result, both the pool of active Canadian players in the region, as well as their dealmaking abilities and appetites, have grown significantly,” Chow noted.

“Having more people on the ground and a wider spread of targets has ensured that momentum has continued even throughout the pandemic.”

Brookfield, Manulife Financial, the CPP Investment Board, the Ontario Municipal Employees Retirement System and BentallGreenOak were the five most prominent Canadian investors in the Asia-Pacific region during the 2016-2020 period, Real Capital Analytics data showed.


By Son Ji-hyoung (consnow@heraldcorp.com)
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