LaSalle IM to tap Korean outbound property investment

The firm gains an asset management licence to capture heightened demand by Korean institutions seeking real estate exposure in the West.
LaSalle IM to tap Korean outbound property investment

LaSalle Investment Management has gained an asset management licence in South Korea, a move the real estate manager says is in response to growing institutional demand for exposure to overseas property.

The licence, granted by South Korea’s Financial Services Commission, enables LaSalle to offer domestic institutional investors access to its property funds and also co-investment into specific real estate deals.

The firm, which runs a $47.7 billion property investment portfolio, has had a presence in the country for the past 11 years, conducting advisory work. However, institutional interest in outbound property deals has only recently surfaced.

“In the past couple of years, we have noticed growing demand from Korean investors to acquire overseas real estate assets,” says Seoul-based JB Park, LaSalle regional director.

“Currently they are interested in developed markets, including the UK, Germany and the US,” he tells AsianInvestor. “To capture that demand, we applied for the asset management licence last year.”

Korean institutions are largely interested in commercial properties – particularly core, or core-plus offices, indicating a low- to-moderate risk appetite.

LaSalle’s Seoul office has seven staff, with a compliance officer and a real estate securities specialist being added to the team to support asset management activities.

While there are plans to grow the operation, no target has been set for employee numbers, says Park.

Institutions globally tend to invest most heavily in their domestic real estate markets, while selectively seeking property assets abroad for diversification.

Leading the way in Korean outbound property investment are its sovereign funds, which have been making overseas acquisitions.

The National Pension Service (NPS) has spent the past few years building up a portfolio of real estate holdings in markets such as Australia, the UK, Germany and Japan.

Meanwhile, Korea Investment Corporation, in its first London property deal, last year bought an office block opposite the Bank of England for about $115 million.

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