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Multiple commercial real estate property investors have begun purchasing office properties in London in order to capitalize on the city's high returns, according to the Financial Times.
The London market is deemed reliable compared to much of Europe due to the eurozone debt crisis, as well as its history of high returns on investment. Many of South Korea's investment funds have been attempting to seek out and purchase such properties, and London is much more lucrative than the commercial real estate markets in the East Asian country, the news source noted.
One of the main investors is the National Pension Service. The fund is the fourth-largest of its kind in the world, and it has $300 billion in assets, including $5.67 billion in properties outside of South Korea.
"Its assets under management are growing sharply so they are bound to invest abroad because the domestic market is too small for them," Nam Jae-woo, researcher at the Korea Capital Market Institute, told the news source. "But overseas bonds generate too low returns while investing in emerging markets is still deemed risky."
A report from Jones Lang LaSalle noted that foreign commercial real estate investment in London was 85 percent of all transactions in 2009 and 65 percent during 2010.
