IGIS Asset Management provides real estate investment services to investors worldwide. As Korea’s largest manager and one of Asia’s leading firms, IGIS manages €44.6bn of real estate assets for many of the world’s leading institutional and private investors. Serving over 200 investors, including Korean institutions and a growing base of international pension funds, sovereign wealth funds and regional private investors, IGIS’s core objective is to provide sound investment performance and maintain clients’ trust.

With over 450 employees across offices in Korea, Singapore, UK and the US, IGIS has the experience and resources on the ground to execute each and every client’s investment objective. IGIS offers diverse real estate investment products including commingled funds, thematic focus funds and (listed) securities mandates.

IGIS’s assets under management are well diversified across commercial mixed, office, logistics and hospitality asset, complemented by its forward-thinking approach and growing track record in new economy sectors such as data centres, living, and life science, all underpinned by technology advancements and demographic drivers. IGIS also maintain an established track record in credit investments as part of its wider product offerings.

With a proven track record spanning over a decade as one of Korea’s leading managers, IGIS is expanding its footprint across Asian markets, including Japan, Australia, Hong Kong, and Singapore, to become a leading Pan-Asian real estate manager offering clients access to public and private investment strategies across Asia.

Strategic corporate development

Our near-term strategy aligns with our corporate vision of delivering high-value investment solutions and building lasting client relationships. We offer a comprehensive commingled fund series spanning core, core plus, value-add, and opportunistic strategies, all strategically positioned in the Korean market. We also provide customised separate accounts, joint ventures, and club funds, with particular expertise in specialised sectors including data centre, life science, living and senior housing.

As we expand across Asia Pacific gateway cities in Singapore, Japan, and Australia, we remain committed to providing exceptional service through tailored investment strategies. We focus on building local platforms through our regional local teams and strategic partnerships, combining local expertise with our established investment management, development and operational expertise.

ESG considerations are fundamental to our business approach and asset management. Led by our dedicated ESG team and Steering Committee, we pioneer sustainable practices in Asian real estate markets while ensuring long-term value creation and staying ahead of future trends.

Sector forecasts

INDUSTRIAL: South Korea’s logistics market showed high e-commerce penetration and size through 2023. In Q1 2024, e-commerce penetration rose slightly to 33%, driven by inflation rather than transaction growth. In H1 2024, small to medium properties saw slight price increases despite slower transaction volumes. The southeast experienced rapid price drops due to 2023’s massive supply increase. Vacancy rates reached 14% for dry and 41% for cold storage, with notable supply-demand imbalance in the southeast.

We expect a continued transaction slowdown as distressed assets enter the market, leading to auction-driven price corrections. While new 2024 supply focuses on south/west regions, southeast vacancies should stabilize by 2025 due to strong demand and limited future supply. Cross-border e-commerce growth, both inbound and outbound, promises new demand. The west region, preferred by cross-border tenants for its global ports, is likely to absorb oversupply quickly.

OFFICE: South Korea’s office market remains resilient compared to global peers, supported by limited supply and low work-from-home adoption. Unlike other markets, it has largely avoided significant price corrections. During the first half of 2024, major completed deals were primarily driven by demand from global asset managers and corporate headquarters usage-demand. Despite a modest increase in new supplies, most of the supply is focused on non-core business districts (ie, Magok). Consequentially, the growing demand for leasing has continued. Rents climbed 6-8% year-over-year, while vacancy rates held steady at a low 2.4%, significantly below the 5% natural vacancy rate. However, a notable trend emerged: the strong leasing momentum within the market began to decelerate, evidenced by a slowing rent growth rate and a decelerating increase in occupied stock.

We expect the office investment market to recover by late 2024, though price adjustments may extend cautious investor sentiment. Limited prime office supply over the next five years will maintain demand, but rapid price appreciation is unlikely. The trend toward prime/grade-A offices will continue, and distressed assets may increase as Korean savings banks realize losses from H2 2024.

RESIDENTIAL: Korea’s rental housing market has traditionally been dominated by individual investors through direct ownership and the Jeonse system (unique lease arrangements with large refundable deposits), limiting institutional participation. However, recent market shifts – including slower housing price growth, reduced transactions, and Jeonse deposit risks – are creating new institutional opportunities.

Three key factors support the sector’s potential: First, despite an aging population, household demand is projected to grow until 2040, with single and two-person households aged 40+ representing 70% of total households. Second, declining housing development since 2020 has led to aging inventory and limited high-quality options. Third, the current individual rental system’s inefficiencies and risks are becoming apparent. These factors, combined with evolving tenant preferences, make corporate rental housing increasingly attractive to institutional investors.

RETAIL: The retail sector has seen a resurgence in commercial districts due to increased offline activities. However, it continues to face challenges stemming from subdued consumer sentiment and a shift towards service-oriented spending. Transaction volumes remain below pre-pandemic levels, with limited diversity in transaction types. We propose a strategic shift in the retail sector’s approach, focusing on traffic-generating attractions and value-add components. This could involve integrating retail spaces with other sectors such as office, residential, or mixed-use developments to enhance overall appeal and viability.

OTHER: The Korean commercial real estate market seeks sustainable returns amid mixed conditions. While potential rate cuts boost sentiment, the market faces challenges from rigid pricing and tight funding. Rising construction costs continue to squeeze project margins. Success in this environment requires asset managers to combine resilient investment strategies with innovative yield focused approaches, while maintaining a long-term perspective.

Investment principles & strategy

We, IGIS, adhere to a research-guided, value-oriented investment discipline built on decades of experience across Asian market cycles. We maintain our vertically integrated investment structure with our real estate knowledge, capital markets experience and applied economic research skill set with a goal to meet our clients’ investment objectives.

Our investment strategies are implemented by experienced teams that work in both private and public markets. Our platform allows our investment professionals to gain local-level property and market insights from more than 450 inhouse specialists across the nation and overseas offices, as wells as a top-down economic perspective from IGIS’ in-house research. We believe a commitment to research and its practical application to decision-making are critical to the success of each and every investment portfolio the firm manages.

Our dedicated teams also employ a consistent and rigorous insight-based investment and risk-mitigation process. We aim to align investor goals with the occupier needs and believe that helping our investors understand the changing needs of end-users will create a long-terms stabilised performance.

We adhere to a disciplined approach to value creation for our underlying property investments. Leveraging off our strong local network and development capabilities, we are able to access off-market opportunities through our unrivaled sourcing capabilities.

For operator intensive sectors, our approach is to adopt a partnership model with the sector-specialised operators through a rigorous selection of the operator- partners to create a winning partnership formula and portfolio scalability, whilst maintaining independence and fiduciary interest to our clients as an investment manager.

Our entrepreneurial spirit and client-focused approach drive comprehensive real asset solutions that deliver long-term value and stable performance by aligning investor goals with occupier needs.

Performance verification

We set target returns for each of our strategies implemented, as our business is to manage investments, work with our clients’ interests in mind and concentrate on the delivery of returns. We have dedicated teams focusing on quarterly reporting and measuring performances against the forecast on an ongoing basis. All of our investments are independently valued by third parties and audited externally periodically.

COMPLIANCE STATEMENT

No representation, warranty or undertaking is given by IGIS Asset Management, its subsidiaries, affiliates, and any other person (jointly referred as “IGIS”) in respect of the fairness, adequacy, accuracy or completeness of statements, information or opinions expressed herein. The information provided here is for informational purposes only. It is not intended for general distribution and is not intended to be a recommendation or legal, tax or investment advice. Nothing contained herein shall constitute an offer to sell or a solicitation of an offer to sell any security or any other investment product or service. Any views expressed were held at the time of preparation and are subject to change without notice. While any forecast, projection or target where provided is indicative only and not guaranteed in any way. Recipients should not place any undue reliance on any forward-looking statements contained herein, and IGIS accepts no liability for any failure to meet such forecast, projection or target.