Souring Global Office Bets Raise Risk of Korean Liquidity Crunch
- Korean brokers have $10 billion of overseas property exposure
- Analysts see bigger losses ahead as loans start to mature
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Investors in few, if any, countries in the world have been burned as badly by the collapse in the commercial real estate market as those in South Korea. Its pension funds, insurance companies and asset managers all plowed billions of dollars into properties across the globe just before the pandemic drove down their value.
But as the losses are tabulated, it is Korea’s brokerages — and especially the smallest of them — that are causing the most angst in Seoul. Regulators at the industry watchdog, the Financial Supervisory Service, are scrutinizing these securities firms particularly closely as they monitor the situation, according to an FSS official who asked not to be identified discussing private deliberations.