CORFAC News

10 Jan2018

Global PMC/CORFAC International Facilitates $12 Million USD Investment Sale in Japan

In the overseas real estate investment market, which has been led by institutional investors, it is somewhat unusual for individuals to buy small- and medium-sized buildings instead of homes. Additionally, there have been few reliable overseas small- and medium-sized consulting companies available to help facilitate these types of sales.

That changed in December 2017 when an individual investor in Korea bought an eight-story building (1,500 square meters in total area) in Nihonbashi, Tokyo, for about 13 billion won ($12 million USD). The purchase was made with the advice of Woori Bank Investment Advisory Center and Global PMC/CORFAC International, a real estate investment advisory firm headquartered in Seoul, South Korea.

The return on investment is 4.25 percent per annum. Since the investor borrowed 8 billion won ($7.5 million USD) of the mortgage loan from the purchase proceeds with a low 0.96 percent, the return on equity (ROE) is 8.38%. The high yield was due to the "leverage effect" because the lending rate was quite low.

Until now, individuals' overseas real estate investments have been made with the help of intermediaries such as REITs or indirect investment products such as funds, or with the help of acquaintances and brokers who live abroad, with investors taking full responsibility for all investment risks. Often there were cases where fraud was committed when investing through a local acquaintance without expertise. "Demand for overseas commercial building investment is increasing in Korea," said Yong-Nam KIM, CEO of Global PMC/CORFAC International, adding "We are seeking out commercial properties for individual customers to use them for branch offices in Japan and offices in Hawaii.”

Original reporting provided by the Korea Economic Daily, January 10, 2018, issue.

 

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Locally Owned. Globally Connected

CORFAC International is comprised of privately held entrepreneurial firms with expertise in office, industrial and retail brokerage, tenant and landlord representation, investment sales, multifamily, self-storage, acquisitions and dispositions, property management and corporate services. Founded in 1989, CORFAC has 46 firms in the U.S., six in Canada and 28 in international markets, including Australia, Colombia, France, Germany, Ireland, Israel, Italy, Mexico, Romania, Russia, South Africa, South Korea, Switzerland and the United Kingdom. CORFAC offices completed more than 10,000 lease and sales transactions totaling 500 million square feet of space valued in excess of $8.0 billion in 2017.