Foreign capital now accounts for nearly 20% of South Korea’s commercial real estate investment, more than double the share five years ago, as global funds target logistics hubs and rental housing amid a prolonged domestic downturn.
The shift began in 2020, when the COVID-19 pandemic triggered changes in global capital flows. In that year, foreign investors accounted for just 8.2% of property transactions. By 2024, that share had nearly doubled to 17.7%, and it reached 19.7% in 2025, according to data from global real estate services firm Colliers.
Despite a domestic market slowdown marked by high vacancy rates in office and retail spaces, international private equity and asset managers have ramped up purchases in South Korea, drawn by falling interest rates, a weakening won, and a reallocation of regional capital away from markets like Hong Kong and Singapore.
“Roughly one in five commercial property deals this year involved foreign investors,” Colliers said in a report.
Logistics centers have emerged as a key asset class. Foreign investment in this segment has increased dramatically, rising from 23.8% in 2020 to 60.5% in 2025. Industry officials estimate the actual share may be even higher, noting that many local acquisitions are underpinned by foreign capital.
“The actual share of overseas involvement in logistics could be as high as 80 to 90 percent,” said one market official who declined to be named due to the sensitivity of the data.
Major investors include U.S.-based Blackstone, which agreed to acquire logistics centers in Gimpo and Namyangju for about 360 billion won ($2.5 billion), and LaSalle Investment Management, which bought a logistics facility in Anseong last year for about 4.18 billion won. Singapore’s GIC and Hong Kong-based ESR have also expanded their presence. GIC owned 25 logistics centers in Korea as of 2024, according to industry sources.
Ryu Kang-min, head of research at local real estate firm RSquare, noted that foreign investors are capitalizing on low asset prices, aiming to acquire properties, lease them, and exit with profits once the market recovers.
Foreign capital is also entering the residential sector, particularly targeting Korea’s shifting rental landscape. With traditional lump-sum “jeonse” leases giving way to monthly rentals, investors see long-term growth in rental income.
The Canada Pension Plan Investment Board (CPPIB), in partnership with local operator MGRV, recently committed about $114.9 million to supply 1,500 rental units across Seoul’s Dongdaemun and Seongdong districts.
The influx of global capital has prompted debate among analysts. Some warn that short-term profit-seeking by foreign investors could leave domestic players holding overvalued assets if capital pulls out. Others argue that foreign capital is keeping the market afloat at a time when domestic investors are retreating.
During the pandemic, Korean investors also poured into logistics amid an e-commerce boom. But investment slowed in 2023 as concerns over oversupply grew. More than 60 million square feet of logistics space was added in the Seoul area in the first half of last year, driving vacancy rates above 15%.
