Amancio Ortega, chairman of Spanish fashion giant Inditex that owns ZARA, has recently purchased a 32.5 billion won (US$27 million) building in Garosu-gil, one of South Korea’s trendiest commercial districts in southern Seoul, according to Chosun Ilbo on Jan. 4.
Currently, the five-story building is occupied by ZARA’s fast-fashion rival H&M.
The local media outlet noted that the deal was brokered by the global real estate agency Cushman & Wakefield.
The real estate agency said that Ortega, who surpassed Bill Gates as the richest man in the world in 2016, has been keen on real estate investments in Seoul’s major commercial districts as he also bought the M Plaza in Myeong-dong, central Seoul, for 430 billion won in 2015.
The report said global funds have also been snatching up commercial properties in major areas of Seoul at an alarming rate and the key attraction is the higher return rate compared to other Asian cities.
The return on investment in commercial real estate in Seoul is around 5 percent -- much higher than that of Tokyo (3.3 percent), Hong Kong (3.09 percent), Shanghai (4.16 percent) and Beijing (4.32 percent). Ortega’s recently purchased H&M building also has a net rental yield of more than 4 percent a year.
“The value of commercial real estate in Seoul is skyrocketing due to the recent expansion of overseas fashion brands into Korea and the expanding domestic food and beverage market,” Kim Sung-soon, executive director of Cushman & Wakefield Korea, was quoted as saying.
By Alex Lee (email@example.com