South Koreans are expected to invest a record amount of money into the City of London’s property market this year.
Savills, the property consultancy, reckons total investment will reach £3 billion in 2018, making them the largest foreign buyers.
The National Pension Service of Korea, the third largest public pension fund in the world, has already made the biggest property transaction this year of any buyer. It bought Goldman Sachs’ new headquarters near Holborn for £1.16 billion, the second highest sum ever paid for a building in the UK.
Stephen Down, head of central London investment at Savills, told The Times that Brexit is not a concern for South Koreans.
“They wouldn’t be here if they were worried and they are here,” Down said. “We were there [in South Korea] for two days last week where we had 14 meetings and the general feeling is they are all looking to invest. They have been busy and active.”
South Koreans are attracted by the yield in City offices, which averages 4.25% compared with 3.25% in Frankfurt.
Down said South Koreans have become a bigger player since some Chinese buyers pulled back after Beijing imposed limits on the acquisitions companies could make overseas.
Overall, Asian investors have accounted for 60% of investment in the City, with £4.77 billion in transactions so far this year, according to Savills.
They have also been acquiring significantly more expensive buildings than British buyers, accounting for nine of the 17 transactions above £100 million. UK investors have acquired 38 buildings this year, double the number bought by Asians, but only eight were above £50 million.