"Next Year’s Commercial Real Estate Faces Extreme Polarization"… KB Real Estate Report Published

[Asia Economy Reporter Kim Hyo-jin] KB Financial Group announced on the 23rd that it has published the ‘2021 KB Real Estate Report (Commercial Edition),’ which diagnoses the conditions of the commercial real estate market for this year and includes market forecasts for next year.

This is the second report published following last year’s edition, featuring key issues in the commercial real estate market selected by the KB Management Research Institute, along with expert opinions on market conditions and future outlook gathered through surveys.

According to a survey of commercial real estate market experts, the majority evaluated this year’s market situation as a ‘recession phase,’ and the number of opinions expecting the market outlook for next year to worsen compared to this year increased.

Due to the impact of the novel coronavirus disease (COVID-19), the markets expected to have the worst investment conditions next year were hotels and shopping/retail, while logistics facilities and data centers were identified as the markets expected to perform the best.

According to a survey of representatives from specialized retail brokerage firms, the prolonged COVID-19 pandemic and the recession in the self-employed business sector are expected to increase vacancies and decrease rents, thereby raising investment risks.

Despite concerns about economic recession, the commercial real estate market saw increased transactions and rising prices this year; however, risks such as ongoing economic uncertainty and deteriorating leasing conditions remain, so next year’s market is expected to see intensified ultra-polarization based on the characteristics of individual real estate assets.

Kim Tae-hwan, a research fellow at the KB Management Research Institute, said, “Next year’s commercial real estate market will be a year of greater uncertainty than ever before,” adding, “As ultra-polarization is expected to progress beyond polarization, careful analysis of market conditions and preparation for risks will be important.”

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