50 Approvals for Knowledge Industry Centers in Q1 This Year... Highest Ever Recorded

[Asia Economy Reporter Donghyun Choi] The rapid growth of knowledge industry centers, which proved their popularity in the real estate market last year by setting a record high number of approvals, shows no signs of slowing down this year.

On the 8th, real estate information company Economy Man Lab analyzed data on knowledge industry centers established since 2011 and found that the total number of newly established and modified knowledge industry centers approved in the first quarter of this year was 50. This figure represents more than a 20% increase compared to 39 cases in the same period last year and is the highest number of first-quarter approvals since the inception of knowledge industry center approvals.

A knowledge industry center refers to a collective building of three or more floors where manufacturers, knowledge industry, and information and communication industry operators and support facilities can coexist, with at least six information and communication industry businesses able to move in. Project implementers or owners of knowledge industry centers can also receive financial and tax support. As of last month, there are a total of 1,158 knowledge industry centers nationwide, including those currently under construction or scheduled to begin construction.

Industry insiders cite “spillover benefits” and “tax incentives” as reasons for the recent surge in popularity of knowledge industry centers. Due to the government’s ongoing housing real estate regulations through this year combined with historically low interest rates, idle funds in the market unable to find investment destinations have flowed into income-generating real estate as a countermeasure. Among these, knowledge industry centers are analyzed to be popular with investors because they offer relatively low investment amounts along with stable income generation.

Additionally, last year the Ministry of the Interior and Safety extended the tax reduction benefits period for companies moving into knowledge industry centers until 2022, allowing companies that meet certain conditions to receive acquisition tax reductions (50%) and property tax reductions (37.5%) that they previously enjoyed. Furthermore, compared to apartments, the shorter construction period results in lower construction costs and fewer regulations, enabling actual resident companies to enjoy relatively superior infrastructure at a reasonable price.

Oh Daeyeol, team leader at Economy Man Lab, stated, “Recently, investors who have lost their way due to historically low interest rates tend to turn their attention to knowledge industry centers, known as niche investment destinations. Among these, knowledge industry centers provide office-level or better working environments at affordable prices, and various tax benefits are offered to resident companies until 2022, so the supply of knowledge industry centers this year is expected to reach an all-time high.”

This content was produced with the assistance of AI translation services.