In 12 years, Yong Nam Kim, CCIM, has developed a vibrant, thriving commercial real estate business in South Korea, providing full commercial real estate services to clients nationally and internationally. Currently, Kim is the president of the South Korea CCIM Chapter, as well as a real estate columnist for the Korea Economic Daily. The Korean minister of employment and labor recently honored him with the Best Businessman of the Year Award. Kim discusses his business and the international commercial real estate market with Commercial Investment Real Estate.
CIRE: Why did you decide to major in real estate and become a commercial real estate professional?
Kim: After 15 years working for construction companies, I had an opportunity to learn about U.S. property management in 2002. I thought if I started my own property management company it could become a very promising business in South Korea.
Realizing the need for both working knowledge and experience in real estate management, I decided to earn a master's degree in real estate and join a building management company in 2003, and by 2004, I established Global PMC, specializing in the management of small and medium-sized commercial buildings. Now Global PMC has grown to be one of the most recognized full-service real estate companies in South Korea. Our services include investment advisory, property management, leasing, project management, and facility maintenance management.
CIRE: How does your firm help South Korean investors find properties both in your country and internationally?
Kim: We have established a brokerage company, GP Realty Inc., and set up a separate office in Seoul's Gangnam Business District to help clients find properties in South Korea. Furthermore, in October 2015, we joined Corfac International to help our clients invest in properties in other countries. To help clients find Asia-Pacific properties, we have affiliated with PRDnationwide (www.prdnationwide.com.au), one of Australia's leading residential real estate services company, owned by Colliers International.
CIRE: What advice do you have for U.S. investors considering investments in South Korea?
Kim: Due to its lackluster economy and resulting high office market vacancy rate in South Korea, office buildings are losing favor with investors. However, thanks to growth in ecommerce and the globalization of logistics, industrial investment is rapidly increasing in South Korea. Investment in multifamily properties is also gaining speed. As is the case in other countries, finding a reliable local partner in South Korea is the key to success.
CIRE: What types of properties are South Korean investors looking for in the U.S.?
Kim: We have two types of real estate investors with a keen interest in U.S. properties: institutional investors and high net worth individual investors. Institutional investors are looking for prime office buildings, hotels, and downtown shopping centers. These South Korean investors have set the record for the highest investment amount in U.S. properties in 2015.
High net worth individual investors show interest in multifamily houses and small-scale retail buildings. While they are not as active in the U.S., South Korean high net worth individual investors are likely to follow in the major institutional investors' footsteps and increase their investments in U.S. properties. According to the Asia-Pacific Wealth Report 2015 (www.worldwealthreport.com), South Korea's population of high net worth individuals grew by 6.8 percent in 2014 to 189,000, while their wealth grew 8.2 percent to $516 billion.
CIRE: What U.S. markets are South Korean investors active in? What types of guidance are they looking for from U.S. commercial real estate professionals?
Kim: South Korean investors are especially active in the Chicago, New York, and Los Angeles markets. While Korean institutional investors receive enough market information and property information from U.S. asset management companies, high net worth individual investors have no access to market information on non-institutional grade properties in U.S. They want quality market and property information from U.S. commercial real estate professionals.
CIRE: How can U.S.-based CCIMs connect with South Korean high net worth individuals interested in non-institutional grade U.S. properties?
Kim: Since South Korean high net worth individuals are unfamiliar with and cautious about overseas real estate investment, U.S.-based CCIMs can cultivate alliances with full commercial real estate services companies in South Korea. For example, Global PMC has signed strategic alliance agreements with most of the major South Korean financial institutions to provide their high net worth customers with real estate investment advisory and asset management services.
CIRE: How has the CCIM designation, your involvement with the CCIM network, and your current presidency of the South Korea CCIM Chapter improved your ability to adapt your skills to multiple marketplaces within commercial real estate?
Kim: The CCIM designation helps me to grow my reputation as a commercial real estate expert. As the current president of the South Korea CCIM Chapter, I am positioning myself as one of the most recognized commercial real estate leaders nationally and internationally.