BUSAN, South Korea — The Buy Busan wave for foreigners is heating up. Foreign investment in Busan has reached new highs including an increasing number of real estate purchases by foreigners in Marine City, which overlooks Haeundae.
Despite the economic slowdown, Busan achieved a high level of foreign direct investment (FDI) at $480 million last year. In 2011, FDI was $359 million, and in 2010, it was $253 million. This is an increase of $121 million and $227 million, respectively.
The highest FDI to date since the 1997 IMF crisis was $490 million in 2000. However, that was a time when foreign investment regulations were more lenient than they are now. With that in mind, authorities view last year’s FDI inflow as the highest to date.
Among the industries where foreign investment occurred are manufacturing (20 percent) and other services (80 percent). Fifty percent came from Asia, 25 percent from Europe, 20 percent from the U.S. and 5 percent from other countries.
The highest FDI last year was achieved as a result of Gangseo District’s Mieum Foreign Investment Zone, where foreign companies received free 50-year leases on the sites and other dramatic incentives.
Also, Sega Sammy Holdings’ purchase of the land containing BEXCO’s additional facilities in Haeundae District’s Centum City amounted to $115 million, which is the largest real estate transaction in Busan and has hugely impacted investment trends in the city.
In addition, on March 28, one of the world’s top three pump manufacturing companies, Germany’s KSB, decided to invest $15 million in Mieum Foreign Investment Zone in Gangseo District to build a factory.
Moreover, there has been an increase in real estate purchases by foreigners in Marine City, which overlooks Haeundae Beach, and also the Gijang area. According to the Haeundae District and Gijang County offices, foreigners’ purchases of real estate surged in 2011 and continues to expand. Haeundae District stated that the number of foreigners’ purchases went up from 89 in 2010 to 99 in 2011, and last year, the number was 96.
The total value also jumped from 4 billion won ($3.6 million) in 2010 to 7.8 billion won in 2011, and in 2012, the amount was 7.6 billion won. The total area of real estate purchases by foreigners was 2,777 square meters (29,900 square feet) in 2010, 3,209 square meters in 2011 and 7,416 last year, which shows a sharp increase.
The real estate purchases by foreigners were mostly centered in Marine City. In the case of Gijang, there was a total of 21 real estate purchases in 2010 worth 2.77 billion won, and in 2011, there were 42 cases worth 7.48 billion won – a more than a two-fold increase.
Source: Busan City News
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