Updated April. 25, 2013 07:26
More than 2,000 people flocked to the first floor of Sydney`s Town Hall in Australia on April 14. Ethnic Chinese living in Australia and those flying from China and Hong Kong participated in the 2013 Chinese Sydney Property Expo, which introduced realty products in Australia to Chinese investors who have emerged as big shots on the global real estate market. Twenty seven companies installed promotional booths and introduced apartments and high-end houses worth between 700,000 and 8 million Australian dollars each, in a race to sell them.
With the Korean property market in a protracted slump, domestic investors have shunned real estate investment, but foreigners are creating increasingly strong investment fever in the realty market here. "Property tour" targeting Chinese investors to Songdo International Business District and Haeundae in Busan has continued to enjoy popularity.
○ Seeking investors in Australia, China, Hong Kong
The Centreville Asterium Yongsan, which took part in the Australian realty fair, is an upscale commercial-residential housing complex built in July last year through redevelopment of Zone 3 surrounding Kukje Building in Seouls Yongsan district. The 128-unit complex of each measuring between 121 and 192 square meter costs 36 million won (32,000 U.S. dollars) per 3.3 square meters.
With the real estate market in a severe slump and the popularity of large-sized apartment units waning in Korea, 15 units in the complex, especially penta houses, remain unsold. We judged that it would be better to seek Chinese investors who have keen interest in the Korean property market, rather than selling them to ordinary Koreans through public sale, said Kim Shin-pan, director for project management at the complexs cooperative. We were surprised to see response much more enthusiastic than we expected in Australia.
Investors reportedly showed avid interest in the view of the complex that overlooks Yongsan Family Park and the Han River as well as massive development projects in the Yongsan district and international schools there. Kim said, We used as our marketing strategy the advantage of Yongsan (Dragon Hill) as an ideal spot, where a dragon is coiling, targeting Chinese people, who believe in feng shui, and this strategy has worked.
The apartment complex also plans to participate in a property fair in Beijing next Wednesday, which will bring together more than 60 countries, in partnership with Colliers International, a global realty services company. Afterwards, it plans to hold investor relations sessions in Hong Kong and Shenyang to stage a marketing campaign.
As the Chinese government toughened realty regulations, wealthy Chinese investors are seeking to find opportunities in overseas real estate, said Anthony Ahn, an executive director of Colliers. Chinese investors, who expressed interest in Jeju Island, are shifting their interest to real estate in the Seoul metropolitan region.
○ Foreigners sign contracts in 2 weeks after housing were put on public sale
At Songdo Campus Town Sky, which opened model houses in Songdo International City, Japanese and Chinese investors signed a contract each to buy an office-residential unit measuring 26 square meters at 117 million won ((105,000 dollars). We were surprised at the unexpected visits by foreigners, said Cho In-gyu, a manager of Cullinan Holdings, the agency for public sale of the office-residential units. Both of them frequently visit Korea on business, and they reportedly decided to invest because they were attracted to the advantages of Songdo, which is close to Incheon International Airport and is being developed into an international city. Notably, the Japanese investor reportedly said that since people cannot find investment opportunities due to ultra-low interest rate in Japan, he is satisfied with annual earnings of 6 percent in rent of Songdo office-residential unit.
The model house for Songdo The # Master View complex, where new homes are on sale in Songdo International City, also has attracted some 100 foreign investors and officials from realty consulting companies from Hong Kong and China for about two months through last weekend from March. We did not promote the project to overseas, but Chinese people who were seeking investment opportunities by visiting Jeju Island and Busan contacted us first after learning about Songdo International City, said Kwon Soon-ki, director for public sales for POSCO Engineering & Construction, the builder of the complex. We were surprised because foreign investors are considering the long-term slump in the Korean real estate market as an opportunity for investment.
POSCO Engineering & Construction hurriedly published Chinese brochures. The company started posting advertisements on a Hong Kong daily last Wednesday, as it steps up a marketing campaign targeting Chinese investors. "Most Chinese investors expressed intent to invest in large-size apartment units worth around 700,000 U.S. dollars each. They seem to believe that those realty products are worth investing because they are cheaper than those in advanced countries," Kwon said.