"Polarization Expected in Knowledge Industry Centers... 8 Sites Scheduled for Completion in Seoul This Year"

Construction Site of Knowledge Industry Center, Siheung-si, Gyeonggi-do

[Asia Economy Reporter Onyu Lim] As the commercial real estate market gains attention due to the spillover effect of strengthened residential real estate regulations, there is a forecast that this year’s polarization by region and product will become more pronounced due to the spread of the novel coronavirus disease (COVID-19).

On the 5th, the Commercial Information Research Institute analyzed statistics from the Korea Industrial Complex Corporation and found that a total of 29 knowledge industry centers are scheduled to be completed nationwide this year. The total building area is 1,436,304㎡.

Although residential real estate regulations continue to be announced, commercial real estate such as knowledge industry centers is relatively free from regulations, resulting in steady supply. Looking at the number of knowledge industry centers completed over the past five years, supply has been made starting with 13 centers in 2017, followed by △2018 (22 centers) △2019 (20 centers) △2020 (29 centers).

The region with the most knowledge industry centers scheduled for completion this year is Gyeonggi-do, with a total of 12 centers. This is followed by △Seoul (8 centers) △Chungnam (3 centers) △Incheon, Daegu, Gwangju (2 centers each).

Researcher Hyuntaek Cho of the Commercial Information Research Institute explained, “Knowledge industry centers attract high interest from demanders due to small investment amounts, relatively free loan environments, and tax reduction benefits. In addition, as the number of one-person and small-scale companies increases, demand for small offices rises, making them relatively safe income-generating real estate investment destinations.”

However, some point out that the supply of knowledge industry centers is excessive. Researcher Cho added, “There are talks of oversupply of knowledge industry centers, and some centers’ sales performance is not good. Therefore, factors such as location, transportation environment, and product composition of knowledge industry centers are becoming more important, and the polarization phenomenon by region and product is expected to deepen gradually.”