51 Knowledge Industry Centers Approved in Q1... "Concerns Over Oversupply"

[Asia Economy Reporter Onyu Lim] The number of approvals for knowledge industry centers in the first quarter of this year reached a record high of 51. Although knowledge industry centers are recognized as prime investment destinations among income-generating real estate, oversupply and profitability polarization depending on the region have been pointed out as issues.

According to the Commercial Information Research Institute on the 28th, an analysis of data from the Korea Industrial Complex Corporation showed that the number of domestic knowledge industry center approvals in the first quarter was 51, the highest ever. The number of approvals in the first quarter has been steadily increasing, with 16 in 2017, 19 in 2018, and 39 in 2019.

The region with the most approvals was Gyeonggi-do (31). This was followed by Incheon (6), Seoul (5), Jeonbuk (3), Chungbuk (3), Daejeon (1), Daegu (1), and Jeonnam (1).

However, there are concerns that the recent excessive supply of knowledge industry centers is weakening profitability. Hyuntaek Cho, a researcher at the Commercial Information Research Institute, explained, "Interest in income-generating real estate has increased due to regulations in the housing market, but the domestic economy's downturn has dampened the mood. Knowledge industry centers attract attention due to the possibility of small-scale investment, relatively flexible loan environments, and tax reduction benefits, but some knowledge industry centers are not performing well in sales due to oversupply."

He added, "With the increasing supply, factors such as location, transportation environment, and product composition of knowledge industry centers have become more important recently, and the polarization phenomenon by region and product is expected to deepen gradually."

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