CBRE Korea Forecasts 'Office Transaction Volume to Drive 10 Trillion Won Investment Market This Year'

Expectations for Commercial Real Estate Investment Activation Due to Global Interest Rate Cuts and Increased Investment Liquidity

On the 30th, a webinar titled "2024 Korea Real Estate Market Outlook" was held, during which CBRE Korea, a global comprehensive real estate services firm, forecasted that the transaction volume of the domestic commercial real estate office market is expected to be around 10 trillion KRW, driving the overall investment market size this year.

At the event, presentations were made on the global, European, and Asia-Pacific (APAC) commercial real estate outlooks, along with a segmented forecast of the domestic commercial real estate market into office, retail, logistics, and investment sectors.

Richard Barkham, Global & North America Head of Research at CBRE, stated, "Although the 2024 global market is not without risks such as recession and slowdown, the possibility of interest rate cuts in various countries raises expectations for a recovery in the real estate investment market."

Additionally, regional research heads anticipated that the repricing phenomenon in the European real estate market will activate transactions, and that the recovery trend in the Asia-Pacific region, combined with ample dry powder (uninvested capital), will expand more investment opportunities.

Choi Suhye, Head of Research at CBRE Korea, who presented the domestic market outlook, explained, "Due to high interest rates making refinancing difficult, along with real estate project financing (PF) risks and deteriorating stock markets causing cash liquidity shortages, there is a noticeable movement of many investors seeking to sell office assets they hold. If numerous ongoing deals by region are successfully completed, the office market will lead the recovery of the commercial real estate investment market this year."

Furthermore, Choi Sunghyun, Executive Vice President of Capital Markets at CBRE Korea, Kim Hyogeon, Partner at Samil PwC, Kim Wonjong, Head of Korea Asset Trust, and Park Siwoo, CEO of CBRE Hyun Appraisal Corporation, held a discussion on strategies and outlooks for the non-performing loan (NPL) and project financing (PF) markets under the theme "Opportunities in Distressed Asset" amid global economic uncertainties.

Lim Dongsu, CEO of CBRE Korea, said, "Despite difficulties in the overall commercial real estate market due to continued high interest rates and economic slowdown, expectations for interest rate cuts by central banks worldwide, including the U.S., in the second half of this year, along with increased investment market liquidity driven by repricing in the European market, will gradually accelerate the recovery phase of the investment market. Domestically, we also expect positive changes due to a solid office market, a recovering retail sector, the gradually stabilizing 3PL industry, and demand in the metropolitan area’s Grade A logistics market." He added, "CBRE will continue to identify opportunities amid uncertainties this year and establish itself as the most trusted partner by providing excellent services to enhance clients’ asset values across all real estate business sectors."