IGIS Asset Management provides real estate investment services to the investors world-wide. As the current largest real estate manager in South Korea, IGIS manages circa €43.5bn of real estate assets on behalf of many of the diversified world’s leading institutional and private investors.
With over 450 employees operating from five offices located in Korea, Singapore, UK, Germany and the US, IGIS has the experience and abundant resources on the ground to execute each and every client’s investment objectives. IGIS offers wide range of real estate investment products including commingled funds, separate accounts and (listed) securities mandates across the full spectrum of investment strategies.
With a proven track record over a decade as one of the leading managers in Korea, IGIS is also expanding its footprint across other Asian markets, including Japan, Australia, Hong Kong and Singapore, to become one of the leading Pan-Asian real estate managers in order to offer its clients an access to public and private investment strategies across Asia.
Strategic corporate development
Our strategy over the near term is aligned to our overall corporate strategy, which is to provide active high-value investment solutions and develop long-term strategic relationships with our clients together with our employees. Key pillars in our active investment solutions include our commingled fund series for core, core-plus, value-add and opportunistic strategies, all well-positioned in Korea market. We are also flexible to provide selective separate accounts and joint ventures / club funds opportunities, especially in niche sectors, such as data centre, life science, studio, medical and senior housing.
We also expect to continue delivering industry-leading service to our capital partners, clients and tenants we serve as we expand our presence in Asia Pacific. We will continue to offer strategies across the risk spectrum that are tailored to the needs of our partners and clients. We have been keenly focused on building local platforms by exporting our culture and our investment management, development and operational expertise in all real estate market segments.
Investing responsibly for our investors, as well as looking towards longevity and future trends are becoming even more crucial today. We believe ESG factors are essential to assess the quality of our company and the assets we manage. It is our mission to be the leader in Asian real estate market in terms of implementing ESG and ensuring our knowledge on best practice is ahead of the pack.
Sector forecasts
INDUSTRIAL: The Korean logistics market has achieved a higher e-commerce penetration rate and a larger market size than other countries by providing fast and high-quality services such as ‘early morning delivery’ and ‘same-day delivery’. In 2023, the logistic sector shows market contraction such as an increase in the average vacancy rate and a decrease in rent due to economic growth slowdown and oversupply in cold warehouses in the western region. However, the average transaction size and market growth rate are still high compared to other global countries. The growth of the logistics market is expected to slow down in 2024 due to reduced consumption and sluggish economic growth, which may result in the trend changes in logistics centres by major players.
On the supply side, new supplies are expected to be delayed due to financing and business issues. The market is expected to be strengthened based on the existing large core assets in a condition where the new supply is limited due to the high construction costs and regulations on licensing, along with the conversion of oversupplied cold warehouses to dry warehouses or other uses.
On the demand side, e-commerce and 3PL companies are expected to change from quantitative expansion to qualitative efficiency to improve operational efficiency, such as strengthening market dominance of major players, locations and size of warehouses, and manpower sourcing.
The Korean logistic market has grown through the quantitative expansion of small and medium-sized logistic centres near the metropolitan area. In the future, logistic centres are expected to grow within operational efficiency and existing large core logistic centres rather than quantitative expansion.
OFFICE: The Korean office market maintains solid growth compared to other global countries due to a lack of new supply, increased usage space per capita, and new demand. The rental market continues to grow steadily, with rent growth in the 7-10% range and vacancy rates below 2%. In terms of financing, the size of transactions has decreased due to interest rate hikes and liquidity contraction. However, considering Korean companies’ work culture, the Korean office market is still stable compared to other global office markets.
In the mid to long term, changes in demand are expected due to economic uncertainty, worsening corporate performance, and a decrease in labour by technological development such as AI. However, in the short term, the market is expected to be polarised for the demand in ‘flight-to-quality’ and ‘value for money’ considering cost efficiency because companies continue to compete for office buildings and talent acquisitions.
In 2024, the office market is expected to experience an inflection point for the demand side, such as slowing business expansion by companies and reducing office space by startups and ventures due to weak financing.
Our company believes that the clustering development strategy and the ESG/ carbon neutrality value up strategy of existing assets to strengthen tenant retention will be important investment strategies to prepare for the market changes. Regulations for energy reduction are continuously strengthening, and demand of energy efficiency for the cost saving is increasing. It may be the time to prepare for the enhancement of asset value in terms of low-carbon green assetisation, and energy efficiency.
RESIDENTIAL: The rental housing business in Korea was not generally preferred by institutional investors as the market was dominated by individuals in the form of either direct purchase or Jeonse system(a type of refundable lease deposit that is about 60-80% of the housing price for fixed terms). However, housing tenants’ perception of rental housing is changing because of the slowdown in housing price growth, the contraction of transactions, and the returning Jeonse deposit risk issue in Korea.
There are some negative factors such as population decline and entry into a super-aged society, but the number of households demand continues to increase until 2040. Among those demands, single and two-person households in their forties or older account for about 70% of the total number of households. New supply has been decreasing since 2020 which caused an increase in old housing and a decrease in high-quality housing. Considering the expansion of potential risks in the individual rental housing market, the tenants’ perception changes about rental housing, and the expansion of single and two-person household demand, the investment attractiveness of the corporate rental housing business is expected to increase in Korea for institutional investors.
RETAIL: For the retail sector, commercial districts have been revitalised due to the recent activation of offline activities and the optimistic shift in consumption sentiment due to the slowing inflation. However, the actual transaction volume has decreased compared to the previous year, and the type of transactions is also in a limited situation, such as for development purposes. As the consuming population recovers sharply around the core commercial districts, further improvement in the retail sector is expected especially in major commercial districts.
OTHER: Globally, the growth or decline cycle of real estate investment assets is gradually shortening. Due to technological innovation and changes in industrial structure, the competitiveness of traditional commercial real estate such as offices and retail based on preferred location and asset conditions is decreasing.
The types and concepts of blue-chip properties are changing with the growth industry trend cycle such as life science, data centres, and studio parks. The operational capabilities in real estate investment become more important as the growth assets trend changes, and changes in investment and operation methods are expected due to an increase in ESG regulations and construction costs.
Investment principles & strategy
We, IGIS, adhere to a research-guided, value-oriented investment discipline that reflects over the decades of experiences across the market cycles in Korea. 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 in-house 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.
Our focus on delivering results is driven by our values, entrepreneurial spirit and our clients’ needs. Together, our team specialises in comprehensive solutions within and across the real assets’ investment categories, with a distinct approach to driving performance and long-term value.
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.
