Business Korea sat down to speak with Darren Krakowiak, managing director and country representative of CBRE Korea to ask him about the commercial real estate market in the country. Drawing on his 8 years of experience in the commercial real estate market in Seoul, Darren spoke at length about the commercial landscape of Seoul and his plans for the future of CBRE.
Q: Can you summarize what CBRE Korea does for its clients?
We work with owners, investors, occupiers and tenants of real estate. I think an easy way to explain what CBRE does is to think of an office building. Before it is built, an investor might want to do a feasibility study on a project, and that’s something we can deliver. Then, when its under construction, an investor might want to monitor the construction company. Then when it is done, we can lease or sell it as an agent. We try to help our clients maximize the value of the real estate we manage.
Q: Are there any unusual restrictions for international buyers?
Not really. After the economic crisis, Korea became liberal when allowing foreign investors to purchase real estate. Prior to 1998, there were rigid restrictions. After 1998, it was a friendly place for overseas investors to own real estate.
And business is good. Foreign buyers are coming into the market, which is good for us. And companies are moving a lot, so that helps us with our transaction business. We are what an analyst would call a recession-proof business. When we take a hit on the transactions side, we still have underlying annuity revenue to keep the lights on.
Q: The Asia-Pacific slice of the CBRE pie is $41.5 billion, or around 12% of total CBRE activity. Where does CBRE have a larger presence, and where a smaller presence, than Korea?
CBRE Thailand is similar to Korea. We’re slightly more efficient in Korea, even though its a bigger business in Thailand. The next bracket up would be markets like Hong Kong and Singapore, where CBRE has a lot of clients. Places like the Philippines, Malaysia, and Vietnam are the next bracket down.
Q: How does CBRE Korea’s presence in the Korean market compare to other real estate firms’ presence?
We have 294 employees, which makes us the largest global real estate firm in Korea. We are considerably bigger when it comes to head count at CBRE vs. our global competitors. One of the reasons for that is that in 2015 there was a merger with GWS and that added 100 people.
Q: Can you name some of the best properties you manage?
One is the FKI building in Yeouido, which is the 50 story building south of the IFC. We just won property management with that and are transitioning into it. We also recently took over management of K Twin Tower about 3 months ago. A third example we can mention is Gangnam Finance Center, formerly known as Star Tower. We are very happy to work for all of our clients, but those are three good examples.
Q: What plans do you have for CBRE?
We’ve set in place a vision to make CBRE the undisputed market leader in commercial real estate services by embracing service culture. We have 7 priorities, areas that we want everyone to focus on, which are growth, clients, collaboration, retention, platform, leadership, and continuous improvement.
CBRE Korea was quite detached from the global platform before my tenure. It wasn’t benefiting from the scale and capabilities of the CBRE group as a whole. Now, CBRE Korea is operating in tandem with the APAC businesses and CBRE globally to make sure that when clients come to CBRE Korea, they get the consistent benefits of the entire CBRE Group.