KIC Discusses European Real Estate Market Outlook with Domestic Institutions Entering London

The sovereign wealth fund Korea Investment Corporation (KIC) hosted a gathering in London, UK, where Korean institutional investors, local experts, and global real estate consulting firms came together to discuss the outlook of the European real estate market.

KIC announced that it held the 26th "London International Financial Cooperation Council" on the afternoon of the 25th (local time), organized by its London office.

About 30 investment officials from the government, public investment institutions, securities, banks, and insurance companies attended the meeting, including the financial counselor of the Korean Embassy in the UK.

At the meeting, Nick Whitten, Senior Researcher for Europe at the global comprehensive real estate consulting firm Jones Lang LaSalle (JLL), gave a presentation focusing on the rental residential sector.

Senior Researcher Whitten stated, "The residential sector in the European real estate market has been steadily growing recently," adding, "In 2006, it accounted for about 8% of European real estate transaction volume, but by 2022, it increased to 24%." He further noted, "This is a level similar to office transaction volumes."

He also mentioned that recently, diversification has occurred within the sector, including not only traditional rental housing such as multifamily but also single-family rentals, student housing, and healthcare facilities including senior living.

He explained, "Rents for private rental housing in Europe have structurally grown, rising 16% over the past decade," while "new housing permits in Europe have sharply declined since 2020, leading to expected future supply shortages."

Senior Researcher Whitten forecasted, "Due to the risk of high construction costs, the number of new housing developments is expected to decrease, so it is time to pay attention to the residential sector and consider investments."

Park Jin-sung, head of KIC’s London office and organizer of the event, said, "Amid various recent changes in the real estate market, this was an opportunity to closely examine the trends in the residential sector that investors are focusing on," adding, "We will continue to strengthen exchanges and cooperate with domestic institutions."

KIC has overseas offices in global financial centers including New York and San Francisco in the United States, London in the UK, Singapore, and Mumbai in India. It strives to share overseas investment information and build mutual cooperation systems with domestic public and private financial institutions operating locally.