Korea Infographic - Korea In & Out 2022

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Inbound Investment

• Foreign investment in Korean commercial real estate reached US$1.7 billion in 2022. Although the favourable KRW-USD exchange rate continued to lure foreign buyers to Korea, overall investment volume fell by 11% from the previous year as more investors adopted a wait-and-see stance in response to high borrowing costs and price adjustment expectations.

• Foreign investors’ demand for Korean office property increased significantly during 2022, with this asset class accounting for 66% of total inbound investment volume. With the Korean office market continuing to report low vacancy and significant rental growth due to limited supply, investors were seen pursuing value-add strategies to increase asset value.

• Inbound investment to Korea in 2022 was characterised by Asian investors’ purchasing offices and U.S. investors buying logistics properties. This marked a reversal of the trend observed in 2021.

Outbound Investment

• Korean outbound investment totalled US$5.2 billion in 2022, a decrease of 20% y-o-y from 2021, and marking the lowest level since 2014.

• While Korean outbound investment decreased across all sectors in 2022, the proportion of investment into each sector was similar to that witnessed during the previous year. In the office sector, which accounted for about 70% of total outbound investment, more than half of the volume was allocated to Europe.

• Concerns over rising foreign exchange hedge costs, driven by the upward interest rate cycle that commenced in the U.S. in March 2022, led to a decline in Korean investment in this market. Investment in Europe recovered, accounting for about 47% of total investment, and investment in Asia Pacific remained at a similar level to last year.