Korean brokerages to unveil public funds for US, Europe property deals
Jan 13, 2017 (Gmt+09:00)
South Korean brokerage firms, on the buying spree of US and European real estate, will roll out public real estate funds in the coming months to sell down their equity interest in offshore properties, signaling a growing presence of individual investors in the country’s offshore fund market as institutional buyers turned cautious.
With eased regulations on public investment funds and plenty of market liquidity, real estate funds targeting individual investors appear to be a new growth engine for the country’s asset management industry, fitting in demand for better-yielding alternative assets from the aging population. They offer 4~5% returns a year to investors who also expect currency gains from offshore funds, as the Korean won has weakened against the US dollar and the euro.
“Offshore real estate yielding annual returns of 4~5% on a steady basis are drawing strong interest from the wealthy,” said a Korea Investment source. “We will unveil two to three more public funds for offshore real estate within the year.”
Meritz Securities Co. Ltd., which acquired several overseas property assets last year, also will launch a public fund in 2017 for an unspecified real estate asset in Europe which the brokerage company is preparing to buy within the first three months of this year. The fund, if introduced, will be the first offshore property fund backed by European real estate for retail investors in South Korea.