This year South Korea could become the biggest investor in the CEE region, delegates heard at the ‘International & Asian Investment – what are the dynamics behind the new wave of international capital?’ panel discussion at the recent CEE Summit in Warsaw, which was organised by Poland Today and Real Asset Media.
‘Poland has become a hot spot for Asian investment,’ said Adrian Karczewicz, Head of Divestments CEE, Skanska Commercial Development Europe. ‘Interest from South Korean investors has been growing very strongly. The driver is the exchange rate, which makes it very attractive to invest in real estate. They spent €3 bln in Paris in 2018, but this year they have moved East and in 2019 they are set to be the biggest investors in CEE’.
The interest in the property market is relatively new, said Chan Woo Bin, Associate Partner, JP Weber: ‘The first Korean investment in Poland was LG in 1995. It started with industrial companies then it expanded and now it has definitely shifted to real estate’. South Korean investors are more interested in taking over existing projects rather than developing, he said, although their strategy may change in future.
‘We are seeing more South Korean and Singaporean investors, more pension funds and family offices and there’s a lot more to come,’ said Natalie Breen, Global Real Estate Legal Leader, Head of Asia Real Estate Desk, PwC. ‘Geographical diversification plays a part, because they realised they were underweight in Europe’.
The region’s strong economic fundamentals are driving the capital flows, said Carsten Loll, Partner, Linklaters, as well as the ease of doing transactions: ‘The legal system is similar in South Korea, the concepts are the same so it is easier for them to invest here’.
Skanska has just done a transaction in Budapest with the South Korean public sector workers’ pension fund. ‘We found their way of working very similar to ours, with a very transparent and reliable approach,’ said Karczewicz. ‘What is important is that they are ready for long-term partnerships. They are here to stay’.
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