"Domestic Commercial Real Estate, Low Possibility of Price Decline"

[Asia Economy Reporter Park Jihwan] There is an analysis that the prices of domestic commercial real estate are unlikely to decline despite the impact of the novel coronavirus infection (COVID-19).

Aegis Asset Management Research Center announced a report on the 'Domestic Commercial Real Estate Market Trends' containing this content on the 20th. This report analyzed market trends targeting commercial real estate (office, retail, logistics, hotel).

The report evaluated, "Although domestic investments are being postponed or put on hold due to COVID-19, it is difficult to see a possibility of asset price decline."

The Seoul office market is forming high prices due to intensified competition among asset managers amid a shortage of listings. It emphasized that Yeouido area, where rents are relatively low, could be an opportunity as vacancy rates may rise in the second half of the year.

The traditional large retail market is expected to see an increase in listings due to deteriorating investment environment caused by changes in consumer trends and COVID-19 issues. When considering investment, the report suggested a strategy applying facilities combining change of use, online and offline stores, and logistics facilities.

On the other hand, the logistics market is explained to be experiencing an increase in vacancy rates due to short-term supply growth following the boom in the logistics industry, as stable growth in online shopping sales is expected. It emphasized that absorbing short-term lease demand to secure profits could be a response strategy.

The report stated, "The hotel market is greatly affected by the inflow and outflow of foreign tourists, and even if sales are insufficient, there is a structure where the consignment company guarantees basic rent and sales-linked rent," adding, "When investing, it is necessary to attempt stable operation by developing co-living facilities that serve some residential functions."

An official from Aegis Asset Management said, "The future real estate market is progressing toward the complexification of traditional retail markets and logistics due to changes in consumer trends, spreading urban logistics," and added, "As environmental issues emerge, infrastructure investment capable of handling waste disposal will also proceed."

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