New agreement bolsters South Korean investment
A new agreement between the Property Council and the Korea Association of Real Estate Investment Trusts promises to strengthen ties as South Korean investors emerge as significant players in the Australian property market.
“For the first time the Australian and South Korean property markets have agreed to work together across international issues, research and investor outreach for the joint benefit of both nations,”says Andrew Mihno, the Property Council’s executive director for international and capital markets.
The Property Council of Australia and the Korea Association of Real Estate Investment Trusts have signed a Memorandum of Understanding to collaborate across a diverse range of interests including research, events, global investment and lobbying efforts.
“We are also looking to cooperate with South Korea to support investor outreach and bring forward investment opportunities for both countries.”
Mihno says there are natural synergies between the two nations.
“South Korea is a sophisticated market and its investors have a strong interest both debt and equity in Australia which enhances the symbiotic relationship between our two countries and industries.”
“This MoU represents a substantial opportunity for all property leaders to bolster their businesses, projects and the industry overall,” Mihno says.
South Korean investors are increasingly setting their sights on the Australian property market, with the total investment from Korea more than doubling over the past 12 months.
In January, Woolworths headquarters in Sydney’s north western suburbs was sold to a group of South Korean institutional investors in a deal worth $336.45 million. The sale of 1 Woolworths Way at Bella Vista, struck on a yield of 6.07 per cent, set a new benchmark for Sydney’s suburban markets.
Also in January, South Korean property investment firm FG Asset Management purchased a federal government office, the Louisa Lawson Building in Canberra, for $225m. This purchase is the single largest in Australia for FG Asset Management, which also outlaid $156m for the Australian Taxation Office at Box Hill in Melbourne’s east and $64.8m for the ATO building in Albury in 2014.
In 2013, South Korea’s Mirae Asset Global Investments purchased the Four Seasons Hotel Sydney for $340m.
Mihno says the MoU also presents a unique opportunity for Australia to further develop and enhance relationships with the South Korean Government.
“The Australian Governments signed the Korea-Australia Free Trade Agreement in 2014, and we see this new MoU as a way deepen ties and share ideas on how we can help our industry become a greater contributor to productivity and growth,” Mihno concludes.