Income-Generating Real Estate Blue Chip 'Jisik Sanup Center' Grows 260% in 7 Years

[Asia Economy Reporter Ji Yeon-jin] Knowledge industry centers have emerged as blue chips in the income-generating real estate sector, showing rapid growth over the past seven years.

According to the report "Income-Generating Real Estate Blue Chip, Knowledge Industry Center's Next Quest" published on the 27th by Samjong KPMG (Chairman Kim Gyo-tae), the number of approved domestic knowledge industry centers reached 130 last year, marking an increase of over 260% compared to 2014, continuing the growth trend.

A knowledge industry center refers to a multi-layered collective building where business facilities engaged in manufacturing, knowledge industries, and information and communication industries, along with neighborhood living facilities and welfare enhancement facilities, can coexist. By intensifying land use in large cities where industrial land is scarce, it helps resolve land shortages, improve urban environments, and simultaneously promote regional economic revitalization. It is also expected to alleviate financial burdens on small and medium-sized enterprises and improve working conditions.

Unlike general income-generating real estate, knowledge industry centers offer benefits such as acquisition tax and property tax reductions and tenant fund support upon occupancy. Recently, as the profitability of knowledge industry centers has increased mainly in the metropolitan area and large cities, development led by private businesses has surged. Regionally, 80.2% of all knowledge industry centers are concentrated in the metropolitan area, while in non-metropolitan areas, supply is increasing mainly in large cities such as Busan, Daegu, and Gwangju.

The report identified the growth factors of knowledge industry centers, which have entered a boom period based on increased demand and rising prices, as ▲ increased demand and supply ▲ expanded external investment ▲ strengthened government support.

Around 2020, amid the second venture boom and rapid growth of IT companies and other knowledge-based industries, demand for knowledge industry centers offering occupancy benefits increased, especially among venture companies, startups, and small and medium-sized enterprises that prefer customized offices in urban areas. On the supply side, amid strengthened housing regulations, domestic medium-to-large construction companies have turned their attention to the knowledge industry center market to secure stable income and diversify their businesses, leading to expanded supply.

Relatively free from real estate regulations and with comparatively lower investment loss risks, knowledge industry centers have sparked an investment craze among individual investors, asset management firms, and securities companies. Furthermore, government-led public knowledge industry center development and support aimed at strengthening the regional economic foundation, urban regeneration, and job creation have driven the boom of knowledge industry centers. However, in some regions, concerns about oversupply and price declines have emerged due to active market entry by medium-to-large construction companies.

Seo Gwang-duk, Managing Director of the Real Estate Advisory Team at Samjong KPMG, advised, “It is important to note the increase in startups and one-person companies that prefer standalone office spaces, as well as the rise in companies favoring smart work and workation after COVID-19.” He added, “Companies need to actively utilize their past factory sites or idle land to enhance corporate asset value through knowledge industry center development or sales. During development, various ideas such as neighborhood living facilities, community facilities, and specialized facilities for workers are necessary.”

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