Ho Chi Minh City's People Committee has licensed 95 foreign direct investment projects with total pledged capital of just under US$1.9 billion in the first quarter of 2008. Of which, there were 27 joint venture projects worth US$889.3 million accounting for 48.2% and 68 100% foreign-invested projects valued at US$957.6 million, accounting for 51.2%.
Notably, 51 projects focus on fields of real estate and consultancy with the total investment capital of over US$1.817 billion, accounting for 98.4% of the total investment capital, 22 projects were adjusted to raise more US$70.5 million of investment capital including 13 industrial projects.
In the first quarter of this year, total licensed FDI capital and additional investment capital in HCM City reached nearly US$1.918 billion while that was US$103.1 million at the same time of last year and USUS$693.3 million at the same period of 2006.
Now, HCM City has licensed 2,731 FDI projects valued at over US$19.206 billion, an increase of 22.8% in quantity of projects and 31% in investment capital against the same period of 2007. Of which, investment capital being poured in industry gained over US$7.399 billion, accounting for 38.5%, over US$6.062 billion poured in fields of realty and consultancy, accounting for 31.6% and nearly US$1.708 billion poured in transport and telecom, accounting for 8.9%.
Korea investors took the pole place in the FDI project number with 601 projects capitalised at over US$2.844 billion or 14.8%,followed by Hong Kong investors with 175 projects worth nearly US$3.426 billion, accounting for 17.8%.
From the beginning of this year to date, some 3,952 private firms were licensed in HCM City with the total pledged capital of 12.084 trillion dong, a year-on-year increase of 32.2% in number of companies and 77.8% in pledged capital.
Top real estate professionals from the U.S. mainland were in Hawaii this week scouting deals for their South Korean clients.
New Star Realty & Investment Group, a real estate firm that caters to the Korean market, hosted a three-day conference to showcase Hawaii's potential for a few dozen of their top producing colleagues on the U.S. mainland.
While South Korean investors have been active in Hawaii real estate for some time, the market is expected to expand significantly over the next several years.
A stronger Asian economy combined with a lessening of Korean bank restrictions and continued weakening of the U.S. dollar has already positively impacted the market.
Anna Choi, the top Southern California real estate agent for ERA New Star Realty & Investment, was in Hawaii this week along with a few dozen or so other top producers from the U.S. mainland to scout the islands for possible real estate investments for Korean clients. Choi, who looked at condominium properties from Waikiki to Turtle Bay, said she could end this buying trip with 30 deals. Among her clients, Choi said, Hawaii is the third-ranked real estate investment market behind New York and Los Angeles.
"Koreans are very interested in Hawaii," Choi said. "This is a safe destination with good weather and a great environment and it's not too far for them."
New Star Realty & Investment Group, a two-year-old real estate firm in Hawaii that caters to Korean investors and second-home buyers, organized the three-day conference to show Choi and her counterparts on the U.S. mainland the potential that Hawaii holds for this niche market.
"We are focusing on Korean investors from Korea and relocation referrals among Korean Americans in the U.S. as well as the local market," said Susan Cassell, New Star Realty's principal broker.
South Korean investors have been active in Hawaii for some time as evidenced by the purchase of 1391 Kapiolani Blvd., 1631 Kapiolani Blvd. and a 3.53-acre tract off Keeamoku Street, Cassell said. However, Korean real estate buying in Hawaii is expected to expand significantly in the next several years, she said.
A lessening of Korean bank restrictions that took place last year has positively impacted the market, Cassell said, adding that her firm closed $10 million in sales to Korean buyers this month alone and expects to see sales volume grew by 200 percent in the next several years.
"They tripled the amount of money Koreans can take out of their country without restrictions," Cassell said. "They can now take out $3 million."
In addition, the number of Koreans visiting Hawaii could soar once U.S. Homeland Security develops an electronic tracking system to accompany its proposed visa waiver program. A new law, signed by President Bush last year, is expected to help travelers from countries like Korea obtain easier access to the U.S.
"We had 54,000 visitors from Korea in 2007, but that could easily double or triple once the expanded visa waiver program is in place," said State Tourism Liaison Marsha Wienert.
While travel officials haven't been given a definitive answer on when the new travel program will take effect, it's certain that once the program's in place Korean tourism and investment in Hawaii will improve, Wienert said.
"Once they have a strong desire to visit here, they'll have a strong desire to invest here," she said.
As the country's economy improves and its exposure to the islands expands, so will its investment portfolio, said developer Peter Savio.
Further weakening in the U.S. dollar could also bring more foreign investment to Hawaii, said Harvey Shapiro, research analyst for the Honolulu Board of Realtors.
Source: STAR-BULLETIN
Overseas property buying jumps 57 % in 2007
January 24, 2008
Korean residents’ property purchases in foreign countries soared 57 percent last year from a year earlier thanks to eased government regulations, the central bank said Thursday (Jan. 24).
In 2007, residents bought overseas properties worth $1.2 billion, compared with $755.1 million in the preceding year, the Bank of Korea said.
Individuals’ buying of foreign properties more than doubled to $1.1 billion mainly because that for investment purposes tripled to $796 million. Purchases of residences inched up to $315.9 million from $272.1 million.
The United States was the most popular destination for individuals’ property purchases, accounting for 42 percent the total, followed by Canada, Singapore and Malaysia.
Meanwhile, corporate entities’ foreign property buying tumbled to $62.4 million last year from $229.3 million a year earlier as builders’ overseas real estate development projects sank.
Overall, Koreans remitted $914.2 million abroad for real estate purchases last year, accounting for 75 percent of the declared amount, the central bank said.
As part of measures to stop the local currency’s gain against the greenback by spurring capital outflow, Korea raised the ceiling on individuals’ overseas property purchases for investment to $3 million from $1 million in February, and removed limits on purchasing residential properties in March.
Source: KOREA.net
Los Angeles drawing real estate investors from Korea after lifting of overseas cap
January 8, 2008
LOS ANGELES: Choung Yang Suk just bought a condominium in the city's Koreatown district — far from her home in South Korea — and plans to retire there in a few years to be near her two grown children.
Choung is among a growing number of Koreans scooping up real estate in the United States and elsewhere after the overseas investment cap in their country was lifted.
Koreans are expected to invest nearly $2 billion in U.S. residential property in 2006, up from $1.27 billion in 2005,
when such investments were mostly limited to large Korean corporations, said Brian Shaffer of the International Real Estate Trade Organization.
Koreans could spend at least $4 billion worldwide on overseas homes in 2007 as a result of the changes made in May that allow an individual to make as much as $1 million in foreign investments, analysts said.
Many of the purchases are being prompted by the strength of the Korean won against foreign currencies and by the economic and political stability offered in some other nations, analysts said.
Much of the money will likely be directed to U.S. cities with large Korean populations, including San Francisco, New York and Atlanta, to take advantage of lower home prices stemming from the weakening U.S. housing market.
Observers said the lion's share of the money will be invested in Los Angeles, which has one of the world's largest Korean populations outside the Asian nation.
"It could very well release a tidal wave of investment into Southern California, particularly Koreatown," said Peter Morrison, a demographer with the Rand Corp. research organization, who has studied home-buying patterns among immigrant groups.
Investors are snatching up the property as long-term investments or as future homes for themselves.
For Koreans with family members in Koreatown, buying homes in the district two miles west of downtown Los Angeles is a particularly attractive proposition.
The five-square-mile swath features hundreds of Korean-owned businesses. Few English language signs are visible along its wide boulevards.
"Koreatown is very convenient for me since I only speak Korean," Choung said through an interpreter. "This is where my people live and I can go to the market or shops without speaking English."
Southern California also has an abundance of banks and brokers catering to Koreans to aid the purchases.
One Koreatown-based lender, Wilshire State Bank, created a special division for overseas borrowers and has closed its first mortgages since the investment caps were lifted, a bank executive, Gene Sheen, said.
Sheen met the borrowers at investing seminars he stages in Korea.
Until May, Korea enforced tight investing rules to stem capital flight after the Asian financial crisis of 1997. Only large firms and individuals with special permits could buy property abroad.
But with South Korea's currency, the won, now near nine-year highs of about 930 to the dollar, government officials have decided to encourage Koreans to spend money abroad, hoping to take some air out of the currency to benefit exporters.
In 2007, Korean officials intend to allow citizens to invest as much as $3 million in overseas property.
If President Roh Moo Hyun gives his approval, caps would be dropped altogether by 2009.
That could free up even more potential buyers for the roughly 1,500 condominium units now on sale or planned in Koreatown as part of a mini-construction boom.
Many of the units are part of high- rises resembling condo complexes in South Korean cities.
Choung Yang Suk bought her unit for nearly $600,000 at the Mercury condominium complex, where about 10 percent of the 80 units sold so far have been bought as a direct result of the eased investment caps, said Oliver Unaka, a spokesman for the real estate agency Forest City Enterprises.
The Martin Group, developers of the 1100 Wilshire building in nearby downtown Los Angeles, has sold about 40 units to Korean buyers since the investment caps were changed, said Ki Ryu, a director for the company.
Planners have overseas Korean investors in mind as they map out future condominium projects in Koreatown.
The Shin Young Group, a Korean construction giant, has started developing its first U.S. project in Koreatown and sees Korean investors as likely buyers for the units at its 40- story 3670 Wilshire project, said Justin Kim of Millennium Enterprises, a partner on the project with the Korean company.
Koar Wilshire Western, which is developing the 22-story Solair Wilshire project atop a Koreatown subway station, has approached a Korean real estate company about marketing its 186 condominium units in Korea, a company executive, Bruce Rothman, said.
Developers said their Korea-based customers so far have arrived through word of mouth among Koreans here and back home, or through advertisements placed on the Web sites of Los Angeles-based Korean-language newspapers.
Rothman said his company is still unsure how aggressively to pursue potential customers in Korea, many of whom would have to be convinced to spend hundreds of thousands of dollars on properties they've never seen in person.
"Are you selling sight unseen, or are the potential buyers from Korea going to come to the United States to pound the pavement?" he said. "Nobody is quite certain how to do it yet."
Indeed, Sheen, the banker, said Koreans are unlikely to embrace foreign property until they see those investments paying off for their neighbors.
But once they do, he said, the Korean trade in U.S. real estate could be brisk.
"This is a big opportunity," he said.
Source: The International Herald Tribune
Korea muscles in on North American Property
Sunday, December 16th, 2007
Along with many British property investors, the Koreans know a bargain when they see one and the US property market is one of them at the moment. According to a report issued by the Korean Ministry of Finance and Economy, Korea’s overseas real estate buying increased in October from a month earlier due to a higher number of purchases in North America. Korean individuals and companies bought $96 million worth of land and houses in foreign countries last month, up from $86 million the preceding month. That brings the total value of the country’s overseas property buying from January to October to $968 million
Individuals and businesses made more purchases in North America last month from the previous month, while making fewer purchases in Southeast Asia. They made 77 purchases in North America, up from 72, while making 96 purchases in Southeast Asia, down from 157. The volume of purchases for investment purposes came to $37 million in October, the report said.
Korea has seen a surge in foreign reserves and earnings in securities companies and are clearly determined to invest some of this new found wealth in the North American property market. According to the Bank of Korea, the nation’s foreign reserves amounted to $261.9 billion as of the end of November, up $1.8 billion from the preceding month.
“A weaker dollar boosted the dollar conversion value of assets denominated in euro and other foreign currencies, while investment profits also grew,” the central bank said in a statement.
Foreign reserves consist of securities and deposits denominated in overseas currencies along with International Monetary Fund reserve positions, special drawing rights and gold bullion. As of the end of October, South Korea was the world’s sixth-largest holder of foreign exchange reserves, outpaced by India for the first time. The country, which was overtaken by Russia in April last year, ranked 5th in the world until September.
Source: Overseas Property Mall in International Real Estate Trends, Trends, United States Property
Malaysia 'Hwan Young Hap Ni Da
November 26, 2007
To the Koreans, Malaysia is like "Asia's America". They favour our multilingual, multi-cultural society and our great variety of foods.
They also have praise for our "developed" economy, with such modern conveniences as world-class infrastructure, medical facilities, shopping malls, hypermarkets and international schools; our political stability that makes their investments safe here; and our globalised outlook.
These, in a nutshell, draw Korean investments to Malaysian real estate, said Korean Press director and head of its property division John K.T. Kim. And the number is expected to escalate: He's looking at a "conservative estimate" of 50,000 to 70,000 Koreans living here by 2009, up from the present 30,000 comprising businesspeople, visitors, students, and expatriates with Korean multinational corporations, including Samsung, Hyundai, LG Electronics, Daewoo and Posko.
I'm also surprised by the huge number of visitors � anything from 30,000 to 80,000 a day � to our website (www.koreanpress.net) property section, indicating their interest in coming here," Kim said.
He suggested the Malaysia My Second Home (MM2H) programme be promoted more aggressively to the Korean market than just via seminars. MM2H, he is certain, will attract many times more people from his country than the existing number of Korean MM2Hers.
"Investing in properties is a Korean culture. Many are looking overseas because Korean real estate is very expensive, which is due to the shortage of land.
"High-end condominiums, offices and shoplots in Kangnam, Jongro and Kangbuk in Seoul, the equivalents of the Mon't Kiara and Damansara locales in Kuala Lumpur, are priced from RM10,000psf to RM50,000psf for highend properties, and up to RM100,000psf for the topend," said Kim.
"Furthermore, the tax is very high for buyers of more than two properties in Korea, which is why many Koreans are investing in properties abroad. The United States is their top choice and Malaysia is second... they usually buy en bloc, as in The Heritage serviced apartments at the Mines Resort City in Seri Kembangan, Selangor," said Kim.
More than that, he said the Koreans, who prefer Oriental and American architecture and design, have also joined hands with Malaysians: They design the property and do the interiors, while Malaysians build them, mostly condos, for security and convenience.
Among these is highrise residence D'Rapport, positioned as a global investment product being developed by Acmar International, which has been involved in city development projects in Malaysia for 70 years, and Korea's Menos 21. It's located near the Korean Embassy and opposite Great Eastern Mall in Jalan Ampang, KL.
Another project is a Korean collaboration with Sunway City Bhd to develop a precinct for the Korean community in Sunway South Quay in Bandar Sunway, Petaling Jaya.
The Koreans, Kim added, generally prefer topend condos priced from RM700,000 to RM1 million in KL's Ampang and Mont' Kiara areas, but an increasing number is also drawn to "new areas with good location, good roads and modern amenities", such as Selangor's Subang Jaya and Kota Damansara.
Source: NSTP e-Media Sdn. Bhd
S.Korea firms eye $6 bln Vietnam property project
2007
Kangwon Land Inc and Starmax Co Ltd, plan to invest US$6 billion to develop a large entertainment complex in Vietnam's commercial hub of Ho Chi Minh City, a government report said on Wednesday. The two companies have signed a joint venture agreement with Si Cat Real Estate Co to carry out the project, which is still subject to government approval, the report said. The complex, located in the city's Thanh Da-Binh Quoi area, will include a 90-storey twin tower, a world-class gaming centre, golf courses and a marina for private yachts. Vietnamese President Nguyen Minh Triet said in the report the government supported the project but wanted the venture to pay attention to land clearance issues. The project signals a further foray into the country's fast-growing property market by South Korean developers.
South Korean developers, such as Kumho Asiana and Keang Nam Enterprises, are entering Vietnam's property market to cash in on soaring demand for quality office and residential space. Dealers said Korean companies were chasing property projects worth a total of $4 billion,including a $2.5 billion investment by Kumho Asiana in Hanoi in what would be the country's biggest convention centre. Keang Nam last month began work on Keangnam Hanoi Landmark, Vietnam's tallest building, expected to cost $1.05 billion. The city government of South Korea's capital, Seoul, is also advising on a $7 billion project to develop prime land along the banks of the Red River that sweeps through the centre of Vietnam's capital, in the country's largest property development so far. Korean developers have expressed keen interest in investing in the projects, dealers said.
Source: Met Vuong – the Vietnam Real Estate Marketplace
London attracts 40% of Korean foreign direct investment projects into Europe
Over the past seven years, London has attracted 40 percent of all Korean foreign direct investment (FDI) projects into Europe, making the UK the most popular investment destination for Korean businesses in Europe in terms of FDI projects. The news comes from Think London, the foreign direct investment agency for London, which has helped a record number of Korean companies expand into London over the past quarter. The announcement was made at a Korean Business Reception, hosted by Think London.
London offers a natural fit for Korean companies, and there are now over 120 Korean firms located in London. Michael Charlton, Chief Executive, Think London said: "London has seen an increase in foreign direct investment (FDI) from Korea in recent months. Think London has helped 7 Korean companies expand into London over the past quarter alone and we expect this trend to continue over the coming years as London’s vibrant Korean community continues to expand”. Think London has so far assisted over 300 companies from Asia-Pacific set-up and expand their businesses in London.
The Mayor of London, Ken Livingstone, who also spoke at the event said: “London is the world's most global city and a leading financial hub for international investors. It is also the world's most multicultural city with over 300 different languages spoken. London has a lively and growing Korean community and any future investors or visitors will always be welcome in our city. I am determined to make sure London is the natural choice for Korean firms looking for a European base to do business and invest.”
London is home to the largest Korean population of any European city, now thought to number over 20,000 people. Students comprise a significant proportion of this population with 1,600 Koreans studying in the capital – 43% of all Korean students in the UK. There has been an 80% increase in student numbers from South Korea over the past seven years. The Korean community has formed a well-developed social and business infrastructure in New Malden and surrounding suburbs of South London and the area is now home to over 8,000 Koreans.
Think London has helped a diverse range of Korean companies establish themselves in the capital recently including SewonCellontech, an engineering company; Hwaseung, a young people's clothes and shoes company; SMI Technology, which specializes in the manufacture of Inkjet-Media.
Samsung Design Europe is one of many leading Korean firms with a presence in London. Samsung Director, Harry Choi said: “London packs world culture, as well as British history, into one small place. It’s a shopping mall to the world, so we have to be here.”
Ms Hyun-Jeon Oh, Regional manager at KOCCA Europe, the National Government Office for the Korean Ministry of Culture and Tourism added: “Being based in London, you not only have the advantage of the English language, but you also have access to a wide range of people from many nationalities who speak a multitude of languages.”
The importance of Korean FDI to the London economy was highlighted last night at the Korean Business Reception, hosted by Think London and sponsored by Standard Chartered. Guests at the reception, which celebrated the importance of London's economic and cultural links with Korea, heard keynote addresses from the Korean Ambassador HE Dr Yoon-Je Cho and the Mayor of London, Ken Livingstone.
Source: North London
S Korea Overseas Property Purchases In Oct $96 Million Vs $86 Million
November 19, 2007
SEOUL -(Dow Jones)- South Koreans' spending on overseas properties rose by around 12% in October due to a rise in purchases in North America, according to government data released Tuesday.
South Koreans purchased $96 million worth of real estate for residential and investment purposes in countries including the U.S., Malaysia, the Philippines, Canada, Singapore, Vietnam and China, up from $86 million in September, the Ministry of Finance and Economy said in a statement.
The government eased rules on overseas real-estate purchases last year to spur dollar demand and reduce the upward pressure on the won.
In the first 10 months of this year, South Koreans spent $968 million on overseas real-estate acquisitions. They spent $744 million on such purchases in the whole of last year, the ministry said.
Source: SmartMoney.com
S. Korea developers foray into Vietnam property
August 27, 2007
Keang Nam Enterprises has begun work on Vietnam's tallest building, expected to cost $1.05 billion and furthering a foray into the country's fast-growing property market by South Korean developers.
The 70-storey Keangnam Hanoi Landmark Tower will house a five-star hotel and more than 900 luxury condominiums in two adjacent 47-storey buildings on the outskirts of Hanoi, the Seoul-based company said in a statement seen on Monday.
Real estate dealers said Korean companies were pursuing a series of major property projects worth a total $4 billion, including a $2.5-billion investment by Kumho Asiana in Hanoi in what would be Vietnam's biggest convention centre.
Kumho, which is already building a $250-million hotel and office project in Ho Chi Minh City, is also leading a Korean consortium to invest $314 million in a residential complex in Hanoi's West Lake area.
Foreign developers, mainly from Singapore, Indonesia, Malaysia and South Korea, have pledged to invest billions in hotels, apartments and offices in Hanoi, Danang and Ho Chi Minh City to cash in on Vietnam's property bonanza.
"Space becomes tighter, tenants become hungrier and the market is on fire with little relief on the horizon," property firm CBRE said in its August report.
Property prices, especially of apartments and condominiums, in big cities have increased more than 50 percent in the past year to about $1,000 to $3,000 per square metre with most projects sold out before construction began, dealers said.
They said a three-bedroom unit at Hanoi's newly opened luxury project, the Manor, retailed at about $250,000 and commanded about $2,000 per month in rent.
Dealers also said the government has promised to ease restrictions to allow resident foreigners and Vietnamese with foreign passports to own property this year, a move expected to boost prices further.
Source: Investment & Trade Promotion Centre – Ho Chi Minh City
Overseas property investors from Korea on the rise
August 10, 2007
The Ministry of Finance and Economy on Tuesday said Koreans spent US$581 million buying 1,387 overseas properties in the first half, topping last year’s $514 million on 1,268 properties. The rise in spending began in February, when the Korean government tripled the ceiling for individual spending on overseas investment properties to $3 million. Since last March, there has been no limit on overseas property for residential purposes.
The number of individual investors who buy overseas real estate for business purpose is surging. Koreans have spent $150 million for business purpose, such as property lease and rental, seven times more than the same period last year.
Small and medium-sized enterprises invested $980 million in overseas properties, up 54 percent from the same period a year ago. Ministry official Song In-chang explained the increase happened because a growing number of asset management companies that buy overseas properties for lease and rental business are categorized as SMEs.
However, an official with the National Tax Service said while there is no tax for people who buy overseas properties in Korea, they will be taxed here if they earn money from leasing or transacting overseas properties. “Many overseas property investors do not know this tax system very well,” he said.
Purchases of overseas real estate by South Koreans jumped nearly one-third in April from March after the government further eased regulations earlier this year, finance ministry data showed yesterday.
South Koreans purchased US$129 million worth of real estate in April for residential or investment purposes in countries including the United States, Canada, Singapore and Malaysia, up 32 per cent from US$98 million in March, the ministry said.
South Korea started easing restrictions on real estate purchases abroad early last year as part of its efforts to remove administrative regulations on capital transactions and partly to help take the appreciation pressure off the won
It further eased regulations in February by raising the ceiling on overseas real estate purchases for investment up to US$3 million per case from US$1 million.
Source: The Business Times
Koreans keen to make Malaysia home
May 14, 2007
A South Korean company has bought an entire condominium block for RM64mil in Malaysia!
Well, this is indeed good news for our real estate industry as it may mark the beginning of more such sales of our residential properties to foreigners following a slew of new initiatives by the Government to boost the property sector.
Hanju I & D Co Ltd through its subsidiary Hanju Savanna (M) Sdn Bhd has bought all the 204 units in Block B of the Savanna Bukit Jalil Condominium in Kuala Lumpur from Berjaya Golf Resort Bhd, a subsidiary of Berjaya Land Bhd. The deal was signed in Kuala Lumpur on May 8.
Hanju Savanna plans to sell all the 204 units to its senior citizens residing in South Korea. Its chief executive officer T.K. Kim is confident all the units could be sold within a few months. The condominium would be redesigned to suit the tastes of the Koreans.
The 5.05-acre development with four blocks will have a gross development value of RM121mil. About 80% of Block A has been sold while Block B has been sold to Hanju. Block C will be 32 high-end condo villas while Block D will have 309 units in an 18-storey block.
Kim said many of his countrymen were keen to make Malaysia their second home and, to meet this demand for Malaysian properties; Hanju is negotiating to buy Block D as well.
The en bloc sale of Block B has boosted not only market confidence but is seen as an endorsement of the Malaysia My Second Home programme that the Government and the private sector have been trying so hard to promote to foreigners.
The Savanna project will be the first Korean residential enclave in a condominium and managed by the Koreans themselves. Foreigners such as the Japanese tend to group together and there had been instances where foreign tenants relocate en bloc.
Of course it is not just a “marriage” of business convenience only as the Savanna project has something the Koreans love most: lots of greenery and it is next to the 400-acre Bukit Jalil Golf and Country Resort with an 18-hole golf resort, and surrounded by about 80 acres of Bukit Jalil International park.
“We are impressed with the greenery surrounding this project,” Choi said, adding that Malaysia's economic stability and multi-racial community were also factors contributing to Hanju's first investment in Malaysia.
The freehold Block A and B will feature 408 units housed in two towers of 22 floors each. They are priced from RM238,880 to RM435,880. There will be five levels of parking podium and a clubhouse, with residential units from the sixth floor up. Most of the units face the golf course with some units either facing Kuala Lumpur, the swimming pool or the stadium and Cheras.
It has full condominium facilities and multiple security checkpoints. Its infinity pool and the “glass” gymnasium overlook the golf course. The Bukit Jalil Station and Sri Petaling Station (STAR LRT) are within walking distance and it is easily accessible via major roads and highways.
Source: The Star (Malaysia)
Korea's American Property Craze Draws U.S. Press Attention
March 8, 2007
Kim Jong-Hyun (32), a Seoul software programmer, is searching with a real estate broker for a house in the U.S. He's going to invest US$1 million. With that money, he can find a four-bedroom house with a three-car garage and swimming pool in New Jersey. That sum would buy only a three-bedroom apartment in the South Korean capital.
While this story sounds like one you might find on the business pages of a Seoul newspaper, it's actually part of larger story about Koreans investing abroad written by a foreign press agency.
In the article from Seoul on Tuesday, U.S. agency Bloomberg News reports that more and more Koreans are snapping up real estate in America as investments. Koreans like Kim, the article says, are investing in overseas property as a way to steer clear of South Korea's regulations on the domestic real estate market. According to the report, Koreans spent some $780 million on foreign real estate in 2006, 34 times more than in the previous year.
Bloomberg says that the rise in spending began when Korea's Finance Ministry tripled the maximum that individuals can spend on overseas investment properties to $3 million. Investment has also been boosted by the government's intensification of real estate regulations, the article says, including a tougher real estate tax policy and the curbing of housing mortgage loans. "Korea levies an annual tax of as much as 3.5 percent on homes worth more than W10 billion and a capital gains tax of more than 50 percent on second properties. But U.S. homeowners pay 0.17 to 1.82 percent of their home's value in taxes, depending on the state. The applicable maximum rate on long-term capital gains is 15 percent," the article says. (US$1=W949)
Bloomberg suggests that spending on overseas property could lead to financial trouble at home, saying that Korea's economic growth may slow due to the huge amounts of capital outflow. "Korean policy makers play down the risks," the article says.
When asked about the article, a Finance Ministry official said, "Money sent overseas is draining the currency market of excess dollars and helping pare the won's gains." A Bank of Korea official suggested the trend may not last. "Talk of a property bubble in some markets abroad will limit buyers' enthusiasm," the BOK official said. But the situation is serious enough that the U.S. press has picked up on it. This is not a story that should be ignored.
Source: The Chosun Ilbo
Korea relaxes cap on foreign investment to benefit of NY market
The New York-Korea circuit is becoming a habit for Corcoran Group executives.
Top brass at the brokerage have recently been bringing a piece of the Big Apple to South Korea, where investors newly freed from currency restriction are eager to invest in Manhattan real estate. Corcoran representatives made three trips to Seoul last year and expect to continue their trans-Pacific pitches as long as there is interest from Korean investors.
"We have a network of people selling U.S. property to South Korean buyers," says Neal Sroka, senior vice president at the Corcoran Group.
The South Korean government in May lifted currency controls, freeing up money for investment and sparking renewed interest in New York real estate among Korean investors. Investors are now allowed to take up to $1 million out of the country to invest in real estate, but that will increase to $3 million in January, and by 2008 or 2009 the limit might be abolished altogether.
New York real estate is already reaping the benefits of these changes. "As the amount of money buyers are able to bring out of Korea increases, investment in New York real estate increases at the same rate," says Sroka.
Brokerages like Corcoran have stepped forward to help Korean buyers become educated about the New York City market. "We've eliminated intermediaries and embraced the Korean brokerage community," says Sroka. "We run information sessions, and we've retained several local lawyers to help in the process, translating a lot of our collateral material in Korean, giving them complete understanding of the market, what's around, and why we think it's a good investment."
Century 21 New York Metro, meanwhile, works closely with a Century 21 franchise in South Korea and one of its agents there, Steve Kim, to bring clients to New York.
"Steve will give us the client's details and pull together what the client is looking for -- usually it's residential -- and then he shows the clients the information that we've been able to find. Then we try to get our agents to speak to them and arrange a visit," says Michael Simon, president and CEO of Century 21 New York Metro, which is based in Manhattan.
Simon said he currently employs four full-time Korean-speaking agents who handle calls from overseas.
Sometimes the buying process is a long one -- up to six months -- and occasionally the apartment a buyer was interested in is gone by that point. Still, as most buyers learn, "inventory is not a problem with all of the new buildings going up" in Manhattan, says Simon.
Also, Sroka notes that most South Korean buyers are not looking for quick turnover with their U.S. property: "The Korean buyer is less interested in the return on investment in the short term; they're more interested in the long-term hold and not as interested in flipping their apartments."
Korean buyers also have confidence in the New York market. "They believe that the U.S. dollar is stable, the New York real estate economy is strong, and they're not hesitant about investing," says Sroka.
Young S. Park, principal broker for New Star Realty and Management in Manhattan, says that many of his Korean clients who have already visited the city tell him they don't feel the need to see property firsthand when something comes up for sale, because "they know it's a good investment."
Apartments in new buildings appeal to Korean buyers, who are willing to pay a premium for them: "$3, $4 and $5 million is the crazy price range we're seeing come in here," Simon notes. "They want a piece of New York; the glitz and the glamour. We just did a $3.3 million deal at the Rushmore at 64th and Riverside, and we have another pending at one of the Trump buildings."
It's not just the glitz that's drawing Korean buyers to New York, but also the resurgent strength of the won (Korea's currency) to the dollar. The currency now trades at about 940 to the dollar, a huge gain from the late 1990s, when the currency experienced a wrenching devaluation in the wake of the 1997 Asian financial crisis.
"The won has increased in value against the dollar, so South Korean investors can invest around the world, but the euro is expensive, so the U.S. is the best. More than 50 percent of South Korean buyers [looking internationally] are looking to invest here," says Simon, "and they come from a big range of backgrounds -- doctors, lawyers, industrialists and parents buying for children."
According to Park, there are three types of South Korean investors looking to put their money in U.S. properties: those who are thinking about residences for their children who are attending U.S. schools or working here; those looking for small-scale investment properties, such as an apartment they can rent out or a walk-up residential building; and those who are looking for a larger-scale investment, such as a resort facility.
Most of the clients Park sees are looking for residences, often on the Upper West Side.
"I think that more than 50 percent of those buyers have an adult kid either starting school or working in New York and who cannot afford to buy a condo apartment."
Park's theory about why many Korean buyers look on the West Side is subway-centric: Most of their children are attending schools such as Columbia, FIT, NYU and Juilliard, which are easily accessible to the West Side subway lines.
Park's company, New Star, which was started in Los Angeles in 1988, is the only Korean-American owned and operated brokerage in the U.S., he says, and it currently has about 50 franchise offices throughout the U.S. The New York office where Park works was opened in March 2005, partly in response to the rising numbers of South Korean buyers interested in property in New York, and it is filling a need.
"We've had many more clients in 2006," Park says. "The number of people who are inquiring has increased substantially because Korean-American brokerage companies have spent some time in Seoul to promote their services. Many people in Korea who have an interest in buying are very informed."
Source: The Real Deal, Inc.
South Korean cash flows into U.S. real estate
Monday, July 10, 2006
Kim Eun Jung is getting ready to buy a second home -- 7,000 miles away from her family's primary residence in Seoul, South Korea. She is about to sign a contract for a two-bedroom condominium in Boston that Realtors say will cost about $750,000.
Although home sales are slowing in some U.S. cities and economists are forecasting softer price appreciation, Ms. Kim and other wealthy Koreans believe now is the perfect time to buy American residential real estate. They are betting that the U.S. dollar will strengthen, causing the value of their U.S. holdings to appreciate when converted into Korean currency, and that even slower home-price appreciation in the U.S. will continue to beat returns in Korea, where high taxes on real-estate profits discourage speculation.
"I believe I am already making an additional 10 percent profit" from exchange-rate changes alone, says Ms. Kim, who will be taking out a mortgage in the U.S. She had been wiring rent money to her son, a college student in Boston, but now he will live in the condo. Ms. Kim says she will keep the unit "for at least eight years, until he receives his Ph.D."
Her investment is part of a flood of cash coming from her homeland. The "money that is coming out of Korea is astronomical," says Neal Sroka, senior vice president of marketing at Corcoran Group, a high-end real-estate brokerage firm in New York. At one development that Corcoran is marketing, Hudson Club in West New York, N.J., more than half its buyers are residents of Korea. Prices for the 344-unit luxury waterfront condos with views of midtown Manhattan across the Hudson River are priced between $400,000 and $1.6 million. Mr. Sroka says about half his Korean clients pay cash.
In some cases, Mr. Sroka says, "money is directly wired out of Korea," to relatives in the U.S. who handle the transactions. Others, he says, use intermediaries, such as consulting firms, real-estate brokerage firms and attorneys -- based in the U.S. and in Korea -- that buy large numbers of condos at one time on behalf of many different clients.
In some ways it is part of a world-wide boom in cross-border investment. Low interest rates and an increasingly unrestrained flow of capital have allowed investment to funnel into seemingly lucrative real-estate markets in different parts of the world.
Although there are no data for residential real estate specifically, Korean direct investment in North America in the first three months of this year was more than $570 million, nearly half the $1.27 billion total for all of last year, according to the Bank of Korea. It includes corporate investment in stocks and bonds, commercial real estate and infrastructure.
"In the eyes of many Koreans, America is the safest place to invest," says Ahn Sang Moh, an agent at New Star Realty & Management in New York, a Korean-American real-estate firm with clients in Korea.
A few years ago, real-estate purchases in the U.S. by Koreans would have been difficult. Seoul had long kept tight control over money leaving the country, which helped South Korea in the wake of the Asian financial crisis of 1997.
"People simply had no way to take the money out of the country," says Lim Ji Won, vice president of the economic research division at J.P. Morgan Chase Bank in Seoul. "This was one of the important reasons why South Korea recovered rapidly."
Since then, the government has resumed its gradual loosening of restrictions and is beginning to deregulate foreign-exchange transactions and allow more foreign real-estate investing. In May, the government lifted the cap on purchases of overseas real estate for residential purposes, although the limit remains at $1 million if it is for investment purposes.
At Rootiz Korea, a real-estate brokerage firm in Seoul, Chief Executive Lee Seung Ick says demand has been growing rapidly for his subscription service, which provides information about overseas real estate. "We had 1,000 members last year, but they increased to 2,000 by May and 6,000 now," he says. While his clients are buying houses, condos and villas all over the world, more than 50 percent of his clients are specifically targeting the U.S., which is perceived as safe and a bargain at current exchange rates.
The won has risen more than 20 percent against the dollar in two years, to about 950 won to the dollar from 1,155, making dollar-denominated investments less expensive when translated into the Korean currency. Mr. Lee is telling clients that the U.S. currency is poised to reverse direction and rise against the won, due to interest-rate increases.
"Low interest rates led American money to look for more profitable markets outside the United States," says Mr. Lee. The Federal Reserve's interest-rate increases "will bring the money back to the United States." This would strengthen the dollar by making U.S. investments more attractive and increasing demand for the U.S. currency.
The Korean won weakened significantly against the dollar during the 1997 Asian financial crisis, giving Korean exports a significant edge in the international market and helping to boost Korea's trade surplus. With the extra dollars from trade, Korea's capital account also grew, resulting in the rapid accumulation of foreign reserves.
That presented a dilemma: a high supply of dollars but low demand for dollars, which caused the won to rapidly appreciate. The Korean government decided to give up one of the country's oldest economic restrictions, whose main purpose was to keep the capital within its borders.
Now, the strong won is hurting the country's export industry. "A stronger won has been undermining Korean firms' comparative price advantage and decreased their profitability," says Bae Sang Kun, senior economist at Korea Economic Research Institute. By easing regulation of overseas real-estate investment and allowing money to go overseas, the Korean government hopes to slow the speed of the won's appreciation.
So far, it isn't clear whether the buying by Koreans is helping to achieve the government's goal. "But in the future, it will likely inhibit rapid appreciation," says Mr. Bae.
Source: post-gazette NOW Business
South Korean Budget Goes to U.S. Real Estate
Monday, July 10 2006
Neal Sroka, senior vice president of marketing at Corcoran Group, a high-end real-estate brokerage firm in New York said that the "money that is coming out of Korea is astronomical. Mr. Sroka says about half his Korean clients pay cash.
Low interest rates and an increasingly unrestrained flow of capital have allowed investment to funnel into seemingly lucrative real-estate markets in different parts of the world. It includes corporate investment in stocks and bonds, commercial real estate and infrastructure.
At Rootiz Korea, a real-estate brokerage firm in Seoul, Chief Executive Lee Seung Ick said that the demand has been growing rapidly for his subscription service, which provides information about overseas real estate.
The Federal Reserve's interest-rate increases will bring the money back to the United States. The Korean won weakened significantly against the dollar during the 1997 Asian financial crisis, giving Korean exports a significant edge in the international market and helping to boost Korea's trade surplus. With the extra dollars from trade, Korea's capital account also grew, resulting in the rapid accumulation of foreign reserves.
Bae Sang Kun, senior economist at Korea Economic Research Institute also said that the stronger won has been undermining Korean firms' comparative price advantage and decreased their profitability. By easing regulation of overseas real-estate investment and allowing money to go overseas, the Korean government hopes to slow the speed of the win’s appreciation.
Source: Turks.US Daily News
Korean’s overseas investment rises 72% in first quarter
April 29, 2006
Overseas direct investment by South Korean companies and individuals soared 72 percent in the first quarter of the year from a year earlier, a government report showed on Friday (April 28). The country’s overseas investment amounted to US$3.47 billion in the first three months of the year, up from $2.02 billion a year earlier, according to the report compiled by the Finance Ministry. The sharp rise was led by companies continued inroads in other countries and more overseas investment by individuals, it said. Investment in China, the top South Korean investment destination last year, jumped 37 percent year-on-year to $976 million in the first quarter. The figure accounted for 28.1 percent of total overseas direct investments by South Korean companies and individuals, down from 35.3 percent a year earlier, according to the report. Malaysia attracted $503 million in terms of South Korean investment in the first quarter. South Korean companies and individuals poured $397 million into the United States in the first three months, compared with $410 million one year earlier, while the figure for European Union countries rose to $299 million from $148 million. The report showed that the nation’s overseas investments in South American countries nearly tripled to $731 million from $184 million a year earlier.
Source: KOREA.net
Overseas property investment freed up
March 2, 2006
South Koreans will be able to buy homes overseas beginning on March 2, without any restrictions to the value, as long as the purchases are for residential purposes, the Ministry of Finance and Economy (MOFE) said on Wednesday (March 1). ROK citizens can now purchase mansions or even castles for residential purposes, hold them for a lifetime, and let their children inherit the property. They had previously been required to sell overseas real estate within three years of returning to Korea. The MOFE is moving to liberalize rules goverening foreign currency transactions to ease the glut of dollars in the local foreign exchange market. The government wants to increase the flow of dollars out of the country to help slow the pace of the won's appreciation. The government raised the offshore real estate purchase cap to $1 million on Jan. 9 from $500,000 last July. The ceiling is totally scrapped now. Still, an individual buying a home worth more than $300,000 is obliged to report the purchase to the National Tax Service. "The purchase of overseas real estate increased, but it is not yet sufficient," said Kwon Tae-gyun, MOFE director general in charge of the International Finance Bureau. There were 4.3 purchases of such overseas real estate per month on average between July and December 2005, with the figure rising to 13 last January, he added. "We're also planning phased-in liberalization for overseas real estate investment from next year," the MOFE official said. In addition to being able to acquire homes abroad more freely, individuals will be able to make as many outbound direct foreign investments as desired and buy any kind of foreign securities. The ministry is planning to set up measures to encourage overseas investment in the service sector and financially support energy projects overseas. Koreans can feel freer to purchase memberships at overseas golf courses or condominiums, since the NTS requires notification only if the price exceeds $100,000, a rise from the previous $50,000 cap. Offshore deposits under $50,000 a year won't be reported as well, also an increase from $10,000. The relaxation of the rules on offshore property investment is the second phase of the government's plans to fully liberalize all foreign currency transactions by 2011. Companies will not have to bring home dollars when export revenue falls short of $500,000. The measure allows corporations to utilize foreign currencies overseas more efficiently. Before, earnings had to be brought in within a year and a half when export revenue exceeded $100,000. Also, domestic funds will be allowed to invest more freely in overseas funds. An ordinary fund can invest up to 20 percent of its assets in overseas funds, up from five percent.
