Societe de la Tour Eiffel, the first French Real Estate Investment Trust

The Societe de la Tour Eiffel is a French Real Estate Investment Trust (Société d’investissements immobiliers cotée - SIIC) based in Paris. It is the first REIT in France, beginning with 2004, and specializes in office buildings and business parks in France, and also owns warehouses, light industrial areas, and nursing home in the South of France.
European REITs first appeared in the Netherlands (1969), and then subsequently in Belgium (1995), France (2003), and the United Kingdom (2007), Germany (2007) and Italy (2007).
They each have their own unique characteristics but also share common traits due largely to the fact that they are often competing for the same investors. European REITs are generally publicly-listed vehicles with corporation structures that make long-term investments in real estate and are exempt from corporation taxation provided certain dividend requirements are met.
When, in 2003, France allowed REITs this probably was the final shoot to start the REITs-race in Europe. The listed real estate market in France has increased multi-fold since then and further growth is expected.
In a sense therefore , the Societe de la Tour Eiffel, the first French Real Estate Investment Trust (SIIC) based in Paris, can be credited with pioneering this movement.
As noted by Mr. Mark Inch, Chairman, Société de la Tour Eiffel, the company started out as the managers of the Eiffel Tower (Tour Eiffel), but became just a shell company after losing that concession to the Paris town authorities in 1979.
It was put up for sale by its owner, HSBC, in 2003 and bought by two investors, Mr. Inch and Mr. Robert Waterland with the backing of Soros Real Estate Investors. This is the first time that a listed company was setup and run by people from property world as against financial companies. Both Mr. Inch and Mr. Waterland are two long standing property professionals with backing of private equity and prompted by their knowledge of the US Reit industry.
Mr. Inch graduated from University of Oxford and Insitut Superieur d'Etudes Politique de Paris. He started his career in 1973 in the real estate sector working for Jean-Claude Aaron. In 1979, he joined the Banque Arabe et Internationale d’Investissement (BAII) and from 1985 to 1990 he was Executive Director of the Bank and Chairman of its real estate subsidiary. In 1990, he founded Franconor, a real estate consulting business. He then co-founded Awon Groupe in 1995. Mr. Inch is also Director of Fondation de la Societe de la Tour Eiffel and Federation des Societes Immobilieres et Foncieres and Manager of Bluebird Holding SARL, Bluebird Investissements SARL and SNC Albion, Managing Director and Chairman of Osiris Gestion de Entidades S.L.U. and Manager of Cergy La Bastide SNC and Manufacture Colbert SNC..
“We are primarily pursuing a bottom up property approach as opposed to institutional top down financial/fiscal approach of most other French property companies. The Company has a portfolio of properties located throughout France, mainly in Paris and Ile-de-France region, as well as in Lyon, Marseille, Nantes, Strasbourg, Caen and others,” he said.
The company was transformed at the outset of 2004 into a Société d’Investissement Immobilier Cotée, the first new entity under the relevant legislation promulgated in 2003. The company made an initial series of acquisitions concentrating on properties with long leases to quality tenants at modest rents.
Quoted on the Euronext Paris Exchange, the company pursues a strategy focused on the ownership and the development of quality office and business space capable of attracting a wide range of tenants in both established and emerging locations. It focuses on the acquisition and retention of high-yielding property assets, secured on long-term leases to quality tenants and has a high dividend payout policy secured from these income streams and enhanced by a selective disposal policy, he said.
Following a first capital increase of € 11 millions in December 2003, the company made a new cash call in July 2004 of € 123 millions with a € 210 million banking credit line being negotiated shortly afterwards. At the end of the year, the property portfolio stood at € 266 millions.
The first half of 2005 saw an additional € 105 millions of commitment however a quantum leap was made at the end of the year with the acquisition of Locafimo, a property company comprising 35 assets totaling 300,000 m² of floor space valued at € 285 millions.
This major transaction was partly financed by a capital increase of € 157 millions. In 2006, the company undertook a comprehensive review of its portfolio including a first disposal of non strategic assets (€45 millions of sales) whilst a move into the development area echoed increasing tenant demand for new buildings capable of providing efficient space at reasonable cost.
The company’s growth enabled a progression to continuous trading on the B compartment of Euronext in March 2006. The following June, the company was included in the European Public Real Estate Association index. In May of the same year, Tour Eiffel Asset Management , Mark Inch and Robert Waterland’s management company, was integrated as a fully owned subsidiary dedicated to the mother company’s portfolio management. End 2006, the portfolio was valued at nearly € 1 billion and extended to 622,907 m².
At the outset of 2007, the company initiated another significant transaction with the purchase of Parcoval for € 110 millions. This acquisition completed and consolidated the company’s position in the business park market notably as Parcoval was a significant co-owner in various parks alongside Locafimo which had been acquired one year earlier.
As a result of its selective disposal strategy and successful marketing of new developments, the portfolio at the end of 2007 amounted to 710 000 m², valued at € 1.2 billion of commitments.
Following 4 years of exceptional growth, the company adopted a more prudent outlook focused on maintaining cash flow through tenant retention and the concerted marketing of development projects.
This said, four modest acquisitions totaling € 40 millions were made and a 18 000 m² built-to-suite office development for Alstom was launched at Massy. Construction was also started on the 14 000 m² speculative office development in Vélizy due for delivery in 2010.
In all, some 50 000 m² of new developments were delivered, of which half was in the Parcs Eiffel, further rejuvenating the profile of the company’s portfolio. At the same time, disposals totaling € 90 millions were made and a major credit facility extended to 2013 was renegotiated with the company’s bankers. At year end, the portfolio comprised 713 323 m² for an unchanged valuation of € 1.104 billion despite the overall drop in market values.
In the wake of the worsening financial crisis in 2009, the company further concentrated
on the consolidation of its cash flow. The core portfolio demonstrated considerable resilience in the face of unfavourable market conditions whereas the new properties completed the previous year leased up satisfactorily, notably the Porte des Lilas, and the new business park deliveries at le Bourget, Marseilles and Bordeaux.
The 18 000 m² Massy Ampère office development was delivered to Altsom and some € 43 millions of asset disposals were achieved. At the end of the year, the portfolio extended to 670 103 m² valued at € 1 058 M reflecting the fact that the added value of new developments offset the effect of reduced values and asset disposals.
Following two years of recession, consolidation remains the order of the day against a background of gradual market recovery, notably in terms of capital values. The company continues to consolidate its cash flow whilst adjusting its financing to changed market perceptions.
Mr. Inch noted that while the French market is very attractive to foreign investors today, this was not the case ten years ago. While traditionally international investors have always invested in the United Kingdom, France was always a closed club.
“This started changing ten years ago and international investors started making a beeline. Three main policy changes can be credited with this. The first is the change in international lease durations, stamp duties and taxation policies,” he said
Earlier, the lease terms available to investors were 3, 6 and 9 years which proved to be restrictive. It has now been changed to 6, 9 and 12 years. In addition, the cost of doing business was very high, as the conveyancing stamp duty was 19.6 percent of each value as against one percent in UK. Today it is 5 percent in France and 4 percent in UK.
Finally, France used to tax both income and capital gains, which was a major disadvantage. , However, over the past ten years, policies have changed and France is the investors choice for the euro zone wand has even exceeded the UK market.
The commercial property market is much larger than UK at 52 million sq meters, and the occupational structure is much more diversified.
While they are two different market both UK and France are complementary, with different types of growth and income..
France has a whole lot to offer tourists and investors alike, which creates a really diverse property market. If anyone is looking for an investment opportunity in France, they will be glad to know that the possibilities are practically endless.
“It has always been an ideal location for property investors, especially. Even now, the real estate industry in France is booming despite the economic woes hovering over most of the world.”
Indeed, a stable market is hard to find these days, so it is nice to know that there are many advantages of investing in France.
“Whether you are an American, European, or Asian investor, you can potentially make good profits by investing in France. Even if you have never invested in anything before, you should be able to find a profitable investment opportunity in France” he said.

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Interview: Mr. Nicholas Wong, Principal, The Townsend Group

The Townsend Group was founded in 1983 by Mr. Terry Ahern and Mr. Kevin Lynch on the premise of providing uncompromised and unbiased real estate investment advice to institutional investors worldwide. Headquartered in Cleveland, it is the largest specialty real estate investment consulting firm in the industry.
In addition to Mr. Ahern and Mr. Lynch, the team is comprised of 52 real estate professionals, including 31 Principals, Consultants and Associates and a dedicated research initiative. Townsend provides global property investment counsel to more than 85 clients on both a discretionary and non-discretionary basis, representing real estate allocations in excess of $100 billion. Its clients include public pension funds, corporations, foundations, endowments, financial institutions and Taft-Hartley plans ranging from $300 million to over $130 billion in total plan assets.
Early this year, the company opened its first office in Asia, located in Hong Kong and appointed Mr. Nicholas Wong, former managing director Asia Pacific of ING Real Estate Select, as principal to focus on business development and investment underwriting in the region. Prior to joining ING in November 2007, he had held senior positions in real estate investment and commercial banking, as well as listed securities analysis. He has been in real estate investment and finance for 22 years with the past 16 years in Asia, having started his career in the US as an appraiser.
“We already have $3.2 billion invested in the region and will focus on business development and investment underwriting in the region. The real estate investment strategies currently available in the Asia Pacific markets are unique in their ability to bring true growth opportunities to global investors,” he said.
Townsend’s global scale and its expertise in manager selection will ensure that the company will be able to offer investors wishing to enter these markets insights into the region that would be difficult to match elsewhere, he noted.
His team is responsible for finding best in class funds/managers and undertakes terms negotiation, due diligence and subsequent investment management, as well as business development in Asia Pacific.
“The Townsend Group is an employee-owned private company. Since 1986, when we earned our first retainer client, our exclusive focus has been providing best-in-class institutional real estate consulting services. We recognized early on that real estate as an accepted institutional investment asset class would grow not only in size but also in complexity. As a result, we structured our company to be prepared for the coming changes,” he said.
Mr. Wong noted that the company began by establishing a dedicated research initiative which has been under the direction of its current Director of Research since 1989. It further broadened the breadth and depth of the team by adding the founders of two other institutional real estate consulting groups, and complementing the team with other key individuals with experience in law, finance, accounting, banking, real estate development, asset management, property management, research and academia.
As a result, Townsend has the most experienced and multi-disciplined staff in the industry. The quality, stability and depth of the team, their commitment to the development of the finest resources, capabilities in investment manager and product selection, and zealous client advocacy resulted in its consulting model being favored by the institutional plan sponsor community.
“We offer both discretionary and non-discretionary consulting services to our clients. Discretionary clients have further entrusted The Townsend Group with the increased fiduciary responsibility associated with the selection of investments subject to Townsend’s discretion without the additional process of going through the clients’ internal investment approval process. Townsend’s basic services are similar in both discretionary and non-discretionary mandates, but the primary differences typically reside in which party retains the authority for ultimate approval of investments,” he said.
In addition to the depth, stability and experience of the professional, the company offers other areas of expertise and experience relevant to clients.
“Given our extensive knowledge of and familiarity with providing consulting services to public pension funds, we are familiar with the issues facing larger public plan investors in real estate, including designing and implementing strategies across multiple sectors in the private and public markets, investing in wholly-owned properties through separate accounts, and developing investment guidelines and procedures.”
Speaking on the Korean market, he noted that Townsend has historically invested in the region and finds that it has a very attractive client base.
A couple of months ago Korea's National Pension Service, the world's fifth-largest pension fund, committed to invest $300 million in troubled real estate through Townsend Group, in a separately managed account. It primarily will focus on snapping up stakes in distressed private-equity real-estate funds and recapitalizing these funds.
The move by NPS, with more than $250 billion in assets, comes as a growing number of opportunistic investors are buying into troubled property funds in deals that give them a steady return and potentially a share in the profit when real-estate markets rebound, he said.
That aside, he finds China and Japan to be the most promising markets in the region. While China is a growth story, with a booming middle class, although Japan has a greying population, there are a lot of distressed ownership of assets in the market.
As for the challenges for the group, he said there is still a lot of uncertainty about the global economy. The company is looking at getting more risk exposure across the region.

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Interview: Mr. Edward Casal, Chief Investment Officer, Global Real Estate Multi-Manager Group, Aviva Investors

Aviva Investors is a global asset management business and a wholly-owned subsidiary of Aviva plc, the world's fifth-largest insurance group and a world leader in financial services.
The company’s real estate team, based in New York, London, Paris, Frankfurt, Singapore and Melbourne is made up of over 170 people, of whom about 95 are investment professionals, including fund managers, asset managers, strategists, researchers and property finance experts.
It currently manage global real estate assets in excess of of $33 billion and already has extensive holdings in Europe as well as a growing presence in North America and the Asia-Pacific region. Of this, more than $6 billion has been invested through multi-manager strategies making it one of the largest global real estate multi-manager investors.
As noted by Mr. Edward Casal, Chief Investment Officer, Global Real Estate Multi-Manager Group, Aviva Investors, the company has been highly active over the past few years, expanding its range of funds and widening the client base.
“We have invested worldwide and on behalf of leading corporations, public pension funds, and other institutional clients, building one of the longest track records in the industry. We seek superior risk-adjusted returns for our clients by creating broadly diversified and actively managed private real estate portfolios,” he said.
Mr. Casal has spent over 20 years undertaking real estate transactions on behalf of institutional investors, industrial corporations and REITs while working at Goldman, Sachs & Co., Dillon, Read & Co, and UBS. In total, he has originated and executed in excess of $20 billion of real estate transactions including both entity-level and real estate property-level transactions. Immediately prior to joining Aviva Investors, he served as Chief Executive Officer of Madison Harbor Capital, a real estate multi-manager firm he co-founded in 2003.
He is a member of the Urban Land Institute, the International Council of Shopping Centers and the Pension Real Estate Association. He is also Chairman of Madison Harbor Balanced Strategies, Inc., an SEC-Registered real estate fund of funds.
Mr. Casal noted that his current team is one of the largest dedicated real estate multi-manager groups in the industry with investment professionals based in New York, London and Singapore.
“We provide local market expertise and manage relationships throughout Asia, Europe, and the Americas. Our global investment committee, comprised of members from each region, assures consistency in the approach and execution of our strategy.”
The real estate team is based in London, Paris, Singapore, Dublin, Frankfurt and New York. The global team is made up of 180 people, including 90 investment professionals, including fund managers, asset managers, strategists, researchers and property finance experts. Mr. Casal’s team is one of the largest dedicated real estate multi-manager groups in the industry with investment professionals based in New York, London and Singapore.
The group has a comprehensive range of products and services, offering real estate investors a unique combination of strengths: significant scale, impressive people, a comprehensive product range, excellent service and an outstanding reputation for innovation.
For institutional clients of scale, the group has created segregated portfolios by investing in a range of real estate ventures. These portfolios are customized reflecting the client’s individual objectives with respect to risk and return, geographic sector allocations and cash flow requirements.
“Aviva Investors has extensive capabilities with commingled investment vehicles. We seek to design portfolios with the core objective of consistently achieving superior risk-adjusted returns for our investors on a highly diversified basis,” he said.
Based on their view of the appropriate strategies for economic conditions, the group seeks to invest in newly-formed real estate ventures sponsored by managers with strong trace records that our experience and research suggest are best-suited to achieve our goals.
“Further, we seek to design a portfolio that ensures appropriate diversification with respect to geography, strategy, manager, property and asset type, capital structure, duration and asset lifecycle,” he said.
Aviva Investors is also a discreet and fast moving buyer of secondary interests in private equity real estate. The team looks at opportunities of all types and in all locations across Europe, the Americas and Asia.
Mr. Casal also noted that the private equity real estate secondary market offers opportunities to acquire specified assets that are well advanced in the investment program. A secondary transaction involves the purchase of one or more limited partnerships or similar interests from the original investor, providing that investor with liquidity.
Speaking on the main challenges, he said that while global growth is rebounding from the depths of the financial crisis, uncertainty regarding the medium-term direction of the global economy is significant, as the fiscal imbalances remain unresolved.
“We continue to structure investment portfolios with the underlying assumption that the developed economies will fluctuate as deleveraging pressures in both the private and government sectors create strong headwinds against relatively strong business financial
conditions. Therefore, relatively conservative investment strategies are warranted. The emerging markets have shown very strong recoveries, but we have to be cautious due to the risk of overheating.”
Accordingly, he said that real estate investing activity in the developed world should remain tilted toward defensive strategies rather than aggressive growth oriented objectives. Even within
emerging markets, growth expectations must be undertaken only with a rigorous value exercise in order to avoid disappointing investment results due to premium pricing driven by excessive
weight of capital overwhelming thin investment markets.
The real estate universe is vast and includes many assets with income-producing characteristics that reduce risk. Real estate investment should appeal strongly to investors during a prolonged period of uncertainty and risk-aversion, in particular because investment strategies can be devised to capitalize on many of real estate’s innate defensive qualities.
“Our investing strategy reflects this multi-speed view of the world, with a defensive bias. While in all markets value investing predominates, in the developed markets we continue to avoid development risk and strategies dependent on a robust consumer discretionary spending, and continue to participate in recapitalizations of real estate ownership vehicles.”
In the emerging world, growth strategies can be tolerated, particularly those that address continued urbanization and growth of middle class wealth. Nevertheless, it is imperative to remain cautious and vigilant regarding valuation bubbles in formation, he said.
Mr. Casal noted that Asia is a large opportunity for the company, having invested in the region for only 3 years now. This year, plans are to expand investments in Australia, Japan, Korea, China , Singapore, Hong Kong and India. The main client targets are cash rich- time poor investors.
“We provide local market expertise and manage relationships throughout Asia, Europe, and the Americas. Our global investment committee, comprised of members from each region, assures consistency in the approach and execution of our strategy,” he said.

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Interview: Ms. Claribel B. David, Vice President, WFTO

The World Fair Trade Organization represents Fair Traders from grassroots through to the G8 and is the authentic voice of Fair Trade, having driven the movement for 20 years. It is the only global network whose members represent the Fair Trade chain from production to sale.
The WFTO is a global authority on Fair Trade, with a vision of a world in which trade structures and practices have been transformed to work in favour of the poor and promote sustainable development and justice. Membership of the WFTO is limited to organizations that demonstrate a 100% Fair Trade commitment and apply its 10 Principles of Fair Trade. WFTO members who are monitored against these Principles are listed in the Fair Trade 100 index of world-leading Fair Trade brands, businesses and organizations.
As noted by Ms. Claribel B. David, Vice President, WFTO, the main aim of the organization is to improve the livelihoods of disadvantaged people in developing countries by linking and strengthening organizations that offer just alternatives to unfair trade structures and practices.
“Our members come together in solidarity and mutual cooperation to create an alternative and fairer way of doing business. WFTO is a global network that promotes fair trade and provides a forum for the exchange of information to help members increase benefits to producers,” she said.
She noted that Fair Trade is a trading partnership, based on dialog, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South.
“Fair Trade is a trading partnership, based on dialog, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers - especially in developing countries.”
Fair Trade organizations have a clear commitment to Fair Trade as the principal core of their mission. They, backed by consumers, are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.
The WFTO members share the following practices: commitment to Fair Trade; transparency; ethical issues; working conditions; equal employment opportunities; concern for people; concern for environment; respect for producers’ cultural identity; and education/advocacy.
All members, reflect in their structures, a commitment to justice, fair employment, public accountability and progressive work practices. They also ensure a safe working environment that satisfied at a minimum all local statutory regulations and oppose discrimination and ensure equality of employment opportunities for both men and women who suffer from the exploitation of their labour and the effects of poverty and racial, cultural or gender bias.
In this context, she pointed out that there are different organizations working to promote fair trade practice and policy, through product certification, advocacy, campaigning and educational work.
Fairtrade describes the labelling system controlled by Fairtrade Labelling Organisations (FLO) International and national partners in different countries. The FAIRTRADE Mark appears on products that meet Fairtrade standards and come from Fairtrade producer organizations.
Product standards have so far been developed for 17 food and non‐food products, ranging from coffee, tea, sugar, cocoa, rice, and fruit to flowers, cotton and sportballs. The product standards specify the minimum price and premium as well as other product‐specific requirements.
The WFTO logo on the other hand is for organizations who demonstrate a 100% commitment to Fair Trade in all their business activities. Only monitored WFTO members are authorized to use the logo. Launched in 2004 at the World Social Forum in India, the logo shows that an organisation follows the WFTO's Principles.
The logo is not a product mark - it is used to brand organizations that are committed to 100% Fair Trade. It sets them apart from commercial as well as other Fair Trade businesses, and provides a clear signal to retailers, partners, governments and donors that their core activity is Fair Trade.
In that sense, both the WFTO logo and the FLO logo are complementary and not in competition, she said.

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Interview: Mr. Christian Schindler, General Manager Korea, Lufthansa German Airlines,

Lufthansa German Airlines' representation in Korea began in 1966 with the signing of a General Sales Agency agreement between Lufthansa and Hyopsung Shipping. However, it was not until November 1984 that Lufthansa commenced its own flight services, flying from Seoul via Anchorage to Frankfurt.

Since then, as noted by Mr. Christian Schindler, General Manager Korea, Lufthansa German Airlines, the company has grown as a major partner in Korea's air-travel sector. Currently it offers a total of 11 weekly flights between Korea and Europe with six weekly flights on the Seoul-Frankfurt route and five weekly flights on the Busan-Munich route (via Seoul).
“Today, we are the largest European airline on the Korean market and are enjoying a growing number of Korean customers. We are also the only European carrier to operate from Busan, he told Infomag.
It also helps that Lufthansa is a founding member of the world's largest aviation network, Star Alliance, which has 28 international airline partners including Asiana Airlines, connecting six continents.
Mr. Schindler joined Lufthansa in 1991, being assigned the networking planning manager for domestic and Benelux passenger services, and as network planning manager and coordinator for the Munich Hub. In 1998, he became business partnership manager and in 2001 was promoted to global corporSince then, as noted by Mr. Christian Schindler, General Manager Korea, Lufthansa German Airlines, the company has grown as a major partner in Korea's air-travel sector. Currently it offers a total of 11 weekly flights between Korea and Europe with six weekly flights on the Seoul-Frankfurt route and five weekly flights on the Busan-Munich route (via Seoul).
“Today, we are the largest European airline on the Korean market and are enjoying a growing number of Korean customers. We are also the only European carrier to operate from Busan, he said.
It also helps that Lufthansa is a founding member of the world's largest aviation network, Star Alliance, which has 28 international airline partners including Asiana Airlines, connecting six continents.
Mr. Schindler joined Lufthansa in 1991, being assigned the networking planning manager for domestic and Benelux passenger services, and as network planning manager and coordinator for the Munich Hub. In 1998, he became business partnership manager and in 2001 was promoted to global corporate key account manager. Since 2004, he was general manager of Morocco until being assigned to Korea last year.
The airlines' success can be largely attributed to the fact that it has localized its operations to cater better to the Korean customers, he said.
Lufthansa provides a choice of Korean cuisine, including bibimbab, cup noodles with kimchi and red-pepper paste as well as a wide selection of beverages including beer and wine.
First and Business Class passengers can indulge themselves in the new Star Chef menus created by Chef Park Hyo-nam of the Millennium Seoul Hilton with wines specially selected by the World's Master of Sommeliers, Markus Del Monego.
Other amenities include various Korean magazines and video/audio entertainment offerings, all tailored for Korean travelers. Upon arrival at Frankfurt and Munich Airports, a ``Korean Welcome Service'' is provided with Korean personnel on hand to meet and greet travelers and assist them with all their needs and information.
We are considered to be the most Korean of all European carriers that fly from here. Moreover, our strong brand and large network of connections makes us the preferred choice of flight,he said.
While the economic slump last year did affect operational revenues, 2010 is expected see a strong rebound. More so, since the Korean economy has displayed an amazing recovery on the back of strong exports.
Speaking on the challenges that foreign carrier face in Korea, he noted that language is a major issue. It is very important to cater to the local needs to meet the various demands of korean customers. For this reason, Lufthansa has deployed many websites and link sites in Korean offering specialized services and has been providing a variety of online promotions for the Korean and foreign customers.
“We see the Internet as the future. Within the next five years, 3 out of every 4 passengers will use the Internet for their travel. The market is seeing a big shift, with more and more people moving towards web portals. This is the worldwide trend, and we hope to doubled our share of web presence.
The strategy is to offer competitive pricing, with attractive high end products. The airline is therefore averse to scaling down its services. It guarantees that economy class pasenger can book seats, special meals with alcoholic drinks all for free and at very competiitve prices.
In this context he noted that the budget carriers do not offer any competition to Lufthansa's operations in Korea.
“The long-haul business has always been low cost, so there is no scope for further price cuts by the budget cariers. It is only in short-haul routes that the budget carriers can prosper. This has been very much evident in Europe, where carriers like Ryan Air and EasyJet have a 40 percent market share in short-haul routes. The same is the case in Asia,he said.
Lufthansa passengers on long haul routes have access to a comprehensive program of entertainment with the extended Lufthansa Media World, 65 video options with 30 cinema films in up to eight languages, 25 TV programs and 10 music magazines from all over the world, 100 CD's, a selection of audio books, 24 radio programs with many international channels, games of skill, action-, board and strategy games as well as 11 language courses. So naturally, passengers prefer these premium services for long trips.
He was also full praise for the quality of services offered at Incheon Airport and said that most of the foreign carriers are appreciative of the facilities. Recent talks of privatization of the airport are welcome
The government announced recently, as part of its budget proposal to sell a 49 percent stake in the airport operator next year. Incheon International Airport Corporation is assessing the share value and sales price with investment bank advisers who will manage the initial public offering. However, an amendment to a related legislation that would authorize the privatization is still pending in the National Assembly after it was introduced last year. A majority of opposition party lawmakers are against the plan.
The Ministry of Strategy and Finance and the Ministry of Land, Transport and Maritime Affairs justify the privatization by arguing that the airport must be supervised by an agency with operating expertise and the ability to attract more financial and capital support so Incheon International Airport can develop further as a leading global airport hub..
“Overall privatized infrastructure is the way to go for the future. It will be a triple win situation for the airport, carriers and passengers. One can expect reduced prices and improvements in services, he said.

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Interview: Mr. Lee Sang-min, Fund Manager, FRM/ Alternative Global Investments Team, KFCC

On June 10th, this year, 333 Market Street, a 33 storey San Francisco office tower occupied by Wells Fargo & Co. sold for $333 million, the city's biggest commercial property deal in three years. San Francisco-based Wells Fargo occupies 100 percent of the rentable space and has a lease that runs to 2026.
The deal was put together by Goodwin Gaw, a Hong Kong-based investor and developer who recently bought 550 Montgomery St. in San Francisco for $12.65 million. The seller was Des Moines, Iowa-based insurer Principal Financial Group Inc., which bought the tower from Wells Fargo for $370 million in 2006 before a collapse in commercial property values. The last single San Francisco office building to change hands for a comparable price was 650 California St., which sold for $300 million in July 2007.
The buyers included Korean Federation of Community Credit Cooperatives (KFCC)
which along with the Korean TeachersCredit Union (KTCU) surprised other bidders by coming on top, to pay about $507 a square foot from the prime office building in the financial district.
By all accounts, this was an excellent foray for the Korean funds, as the Market Street high-rise combined with a long-term lease with Wells Fargo makes this an extremely attractive asset.

As noted by Mr. Lee Sang-min, Fund Manager, FRM/ Alternative Global Investments Team, KFCC, the 657,115-square-foot Market Street high-rise is expected to provide stable cash flow. More than 7% average dividend rate is expected during the investment period.
However, Mr. Lee, who played a key role in finalizing the transaction and putting in place the club deal said it was not an easy win for the Korean funds, especially since it was his first foray in overseas real estate markets.
He pointed out that KFCC has traditionally had a very small footprint in overseas real estate investments and has concentrated on other alternative investments including hedge funds. However, as a result of the financial crisis, the institutional investor has been actively rebalancing its protfolio in order to enhance its returns.
KFCC is a major financial institution in the Korean market, and was established by the Community Credit Cooperative Act to realize the goal of developing Community Credit Cooperatives (CC) as a solid financial organization as well as to take a supervisory role in the promotion of mutual growth with CC. The major responsibilities of KFCC include supporting the development and improvement of local communities through local financial cooperative activities and through various means such as credit business, protecting savings of CC members, educating and training executives and members of CC as well as promoting
friendship and cooperation with international cooperative societies.
Mr. Lee said that the real estate market is a challenging sector for the organization as it offers stable and steady returns especially in the case of prime office building which is located in CBD are with tenants who has high credibility .They are now awaiting the first cash flow from 333 Market Street.
“We are very interested in diversifying our portfolio of investments and have big plans to step into the real estate market, not just in Korea, but also selective advanced markets. The next year promises to be very exciting and challenging for us.”
Most Korean institutional investors, he noted, do not have sufficient experience to invest in real estate overseas. It is not just the complexity of the foreign legal systems but also the lack of familiary with the local business codes.
For this reason, he was very cautious, when he first heard about the sale of the 333 Market Street building. The first serious concern was how to wrap fund effectively. There were a lot of issues to tackle with to launch the fund, most importantly, how to guarantee deal security and follow the bidding process. With as many as 12 other participating bids, the possibility of success was very low.
He however worked hard to get long term credit line and putting together a group of core investors whose credit would be acceptable. Having realized that is important to have credible partners to close any foreign property deal, he worked with the Korean TeachersCredit Union (KTCU) to put in the winning bid, and was able to obtain a 5 years CRS from Korea Exchange Bank.
“Korean institutional investors do not have adequate knowledge on each country’s customs, market convention and legal systems. Moreover, everything is different, even among advanced countries. So what is acceptable in New York may not be acceptable in London. We have to study very hard each time we look at anew market.”
Unlike bigger institutions like National Pension Service, which have a much larger cash flow and diversified investments, KFCC does not have a dollar account  so that currency hedging is one of the most important issue and faces more barriers including market convention ,legal and tax systems to buy core property in foreign country. For these reasons, he favors a club deal with similar institutions like KTCU. He also emphasized that club deals also give more opportunities to reduce risks and burdens than an independent account deal by only one institution and it makes more strong relationship between the institutions that participated in the same clubs for future investments.
Mr. Lee noted that he is now preparing for a real estate deal in London and also looking at other advanced markets.
Most Korean investors do not consider other emerging markets, because the legal and regulaltory systems are not credible. They prefer focusing on more transparent cities.
“However, even that kind of opportunities are quite quickly disappearing. The US retail residence market is still faced with the foreclosure problem, but, prices of prime office buildings which is located on CBD areas in major cities are rapidly increasing. That makes us hesitate to invest.”
Speaking on the Korean office market, he stated that there is still unstability in relation to vacancy rate. Moreover, since 2008 the central bank has kept the base rate relatively low, so even as the economy is getting better, interest rates are low.
Korea's Finance Minister Yoon Jeung-hyun reaffirmed recently that 5 percent growth should be attainable for the next year, as strong business investments and outbound shipments will support the economy. At the same time, the Monetary Policy Committee of the Bank of Korea decided to maintain the Base Rate at its current level (2.25%) for the intermeeting period.
“In the global economy, emerging market economies have sustained their favorable performance, and the economies of major advanced countries have largely continued their moderate recovery trend, even though the pace of the recovery in the US economy has slowed somewhat. Looking ahead, there exists the possibility of the heightened volatility of economic activity and exchange rates in major countries acting as a risk factor for the global economy.it noted
Mr. Lee said that the office market is also lagging behind the real business cycle and vacancy rate is high in the case of US market. Sometimes, if there is a liquidity squeeze, a lucky chance to buy with reasonable price may exist.

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Interview: Mr. Raj S. Inamdar, Principal, Red Fort Capital

PDF Copy of Magazine which includes the Interview Available HERE

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Interview: Mr. Kim Jong-hoon, Minister of Trade

South Korea and the EU formally signed a free trade agreement in Brussels on October 6th and both sides agreed they will aim to ratify the agreement by July 2011. The deal, which has been negotiated starting in May 2007, will lower tariffs, boost trade and investment, and create jobs for both Korea and the 27 EU countries.
The agreement was signed by Korea's Minister for Trade Kim Jong-hoon and European Commissioner for Trade Karel De Gucht and others. President Lee Myung-bak took part in the ceremony after he met with Prime Minister Yves Leterme of Belgium at the Egmont Palace and said the two sides should work hard to meet the ratification deadline.
In an exclusive interview Minister Kim speaks about the implications of this agreement and also the various other FTA's that are being negotiated with other countries.

>>When officially signing the Korea-EU FTA on October 6, 2010 in Brussels, Korea and the EU agreed upon the date of provisional application of July 1, 2011 for the Korea-EU FTA.
The respective domestic procedures in Korea and the EU, namely an approval from the Korean National Assembly and an approval from the European Parliament, should be completed for the Korea-EU FTA to be provisionally applied on the agreed date.
I do not forsee any big difficulties in proceeding domestic procedures in either Korea or the EU. I think, however, that during the process of internal processes both in Korea and in Europe it is very important for both sides to put their best efforts to offer the stake-holders an explanation on the benefits the Korea-EU FTA will bring to the overall economies of these parts of the world in a balanced manner beyond its impact on certain industries or sectors.
>>The Korea-EU FTA is a comprehensive and high-quality trade agreement between Korea and the world's largest economy. Trade opportunities in the EU market for Korean companies in all different sectors are expected to be enhanced as the Korea-EU FTA is implemented.
Once the Korea-EU FTA enters into force, Korean consumers will also have better access to leading brand European goods with good quality at affordable prices and will enjoy a wider range of choice.
-In particular, the elimination of tariffs on major imported European goods, such as cosmetics, garments, wine and whiskey, will bring a huge welfare increase. A recent study by the KIEP(Korea Institute for International Economic Policy), a leading research institute in Korea, suggests that the welfare increase will amount to as much as 3.84% of the GDP (equivalent to $32 billion) in the long run.
The Korea-EU FTA, by enabling Korean domestic manufacturers to import the EU's high-tech parts and materials at a lower price, is also expected to contribute to stabilizing prices of goods and reinforcing competitiveness of the Korean products in the world market.
-In case of parts and materials, the current tariffs center around 8% and are to be eliminated within 3 years under the Korea-EU FTA. It is to be noted that these benefits will be attainable in a relatively short amount of time.
>>The implementation of the KORUS FTA has been delayed for more than three years, due to various factors, including the stagnant American economy and political schedules such as the forthcoming mid-term election.
During the Summit meeting held between the two countries last June, President Obama told President Lee that it was time that the USTR worked closely with its counterpart to make sure that we set a path before the G20 Summit in November and that President Obama intended to present the Agreement to the U.S. Congress for approval in the following few months.
Based on the strong commitment shared by the two leaders, both governments are making concerted efforts to move the Agreement forward.
-There are various voices in both countries regarding the Agreement, including those urging for renegotiations. However, since the KORUS FTA reflects the balance of interests between the two countries, I believe that reopening the texts is not an option.
Given the economic and strategic benefits the KORUS FTA could bring to both countries, it is my strong hope that the Agreement will be implemented in the near future.
>>Although the multilateral trading system continues to play a pivotal role in international trade, the DDA negotiations do not seem to be making much progress. Under these circumstances, FTAs are increasingly becoming a major instrument of trade liberalization and economic reform in the world of global trade and economy.
-To respond to the rapid proliferation of regionalism throughout the world, Korea has been actively pursuing an ambitious FTA policy.
Due to the comprehensive and high-level trade liberalization eliminating tariff and non-tariff barriers through FTAs, Korea has expanded trade with its FTA partners, ensuring increased mutual market access and providing exporters with a competitive edge.
More importantly, Korea's FTAs provide opportunities to enhance economic efficiency through external competition, thereby increasing competitiveness of domestic industries. There are always sectors vulnerable to foreign competition, notably agricultural sector. Through FTA negotiations that involve a painful structural adjustments in its economy while taking care of sensitivities in those vulnerable sectors, Korea has so far been successful in upgrading its economic systems. Through this process, transparency in Korea's economic system and predictability of the nation's regulatory regime has been enhanced.
>>Since the first conclusion of the Korea-Chile FTA in 2003, Korea has actively engaged in FTAs with more than 60 countries as follows:
5 FTAs in effect
- The Korea-Chile FTA entered into force in April 2004.
- The Korea-Singapore FTA entered into force in March 2006.
- The Korea-EFTA FTA entered into force in September 2006.
- The Korea-ASEAN FTA entered into force in June 2007(Goods), in May 2009(Services) and in September 2009(Investment) separately.
- The Korea-India CEPA(Comprehensive Economic Partnership Agreement) entered into force in January 2010.

3 FTAs concluded

- The Korea-US FTA was signed on June 20, 2007 and is currently under ratification procedures.
- The Korea-EU FTA was signed on October 6, 2010 and is currently under ratification procedures.
- The Korea-Peru FTA was concluded the negotiations on 30 August, 2010.

7 FTAs under negotiations

- The Korea-Australia FTA negotiations were launched in May 2009 and the 5th round of negotiations was held in May 2010.
- The Korea-Colombia FTA negotiations were launched in December 2009 and the 4th round of negotiations was held in October 2010.
- The Korea-Turkey FTA negotiations were launched in March 2010 and 2nd round of negotiations was held in July 2010.
- The Korea-New Zealand FTA negotiations were launched in June 2009 and the 4th round of negotiations was held in May 2010.
- The Korea-GCC FTA negotiations were launched in July 2008 and the 3rd round of negotiations was held in July 2009.
- The Korea-Canada FTA negotiations were launched in July 2005 and the 13th round of negotiations was held in March 2008.
- The Korea-Mexico FTA negotiations were launched in December 2007 and the 2nd round of negotiations was held in June 2008.

Other FTAs under consideration
- Korea-Japan FTA: The 1st Director-General-Level Consultation on the Korea-Japan FTA was held in September 2010.
- Korea-China FTA: The 1st meeting on the exchange of views concerning sensitivities regarding a possible Korea-China FTA was held in September 2010.
- Korea-China-Japan FTA: The 2nd meeting of the Joint Study Committee on an FTA among China, Japan and Korea was held in September 2010.
- Korea-Israel FTA: Korea and Israel finished the joint feasibility study on the Korea-Israel FTA in August 2010.
- Korea-MERCOSUR FTA: Korea and MERCOSUR signed the "MOU for the establishment of Joint Consultative Group to Promote Trade and Investment between Korea and the MERCOSUR" for discussing the follow up action regarding the results of the joint study on the feasibility of a Korea-MERCOSUR Trade Agreement.
- Korea-Vietnam FTA: The 2nd Joint Working Group meeting on a possible Korea-Vietnam FTA was held in October 2010.

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Interview: Mr. Michael Bowles, National Director of Asia Capital Markets, Jones Lang LaSalle Japan

The Japanese real estate market makes up a majority of the investable world of Asian real estate for institutional investors due to its sheer size and Japan`s low-risk, developed country profile within Asia.
Compared to other high growth and higher risk countries within the Asia region, Japa's real estate performance has been sluggish and effected by recent turmoil in the domestic economy and global securitization markets.
However, after posting an unprecedented steep decline in economic activity in 2009 with a contraction of 5.2%, the growth rate in Japan turned positive, rising 4.2% in the first quarter of 2010, thanks to the increase in external demand and positive effects from the government's stimulus package.
Despite policy reforms, back to basics and investment conservatism taking centre stage, foreign investor interest into Japan has been positively encouraging. An anticipated rebound of the Tokyo economy, coupled with high commercial yield spreads from the size, depth and maturity of its office sector, has presented attractive buying opportunities abound this undervalued and overlooked market.

As noted by Mr. Michael Bowles, National Director of Asia Capital Markets, Jones Lang LaSalle Japan, due to its strong domestic orientation and subsequent extremely low correlation to other markets, Japan's real estate also holds strong investment attractions. In particular, stable fundamentals, lower volatility and yield spreads among the highest in the world are urging investors from abroad.
Jones Lang LaSalle, which was formed by the 1999 merger of LaSalle Partners Inc. and Jones Lang Wootton, is a leading global provider of comprehensive real estate and investment management services with offices in about 180 key markets on five continents. Jones Lang LaSalle K.K. was established in 1985. In June 2000, Jones Lang LaSalle strategically merged with LBM (Land Building Management), to establish an outstanding property management service delivery platform in Japan. In January 2006, Jones Lang LaSalle Facilities K.K was established to provide a wide range of corporate real estate services, specially focused on facilities management services for manufacturing facilities.
Mr. Bowels is National Director of the Asia Capital Markets team, which focuses on cross-border investment into and from Japan. He currently leads the delivery of sales disposition and investment acquisition services for a number of well-known multinational investor and domestic clients. In the past three years, he has advised on the cross-border acquisitions and divestments of assets located in Japan valued at $2.4 billion.
He doesn't believe that the Japanese market is saturated. He said that investors in other emerging markets like China look at a diffferent criteria. While it is a growth story, it is riskier and less transparent. Japan, on the other hand is stable, predictable, less volatile and attracts a lot of core plus investors.
Cap rates for prime offices in Tokyo's CBD1 have stabilised since mid-2009, and some compression is now evident. The average yield spread of all reported commercial real estate transactions in Japan seems to have peaked in 2009.
In Tokyo, where the market appears to be taking longer to stabilize, the rate of rental decline is beginning to slow down. Unlike other markets, future supply is also limited when compared to the last five years; hence, now really is the time to take advantage of tenant-favorable market conditions before rents hit bottom, he said.
While there may not be many opportuinities in Grade A office spcae, there are still other pockets of opportunity in Grade B offcie space. Also, while most foreign investors concentrate on the main cities like Tokyo, there are also opportunities in the suburban areas along the commuting lines. They are of good quality and offer better returns.
“Most buyers stick to central locations and do not have confidence to buy outside central locations. I relaized that this is because they do not have long term experience' he said
Since the peak in 2007 there have been significant decreases in rental levels. The rents in Grade A are bottoming out, but the worst is over.”
He noted that the vacancy in Grade A is now 7 % and expected to decline. Moreover the Japanese investment market is starting to find traction and has recorded one of the largest increases in commercial real estate volumes globally, up 90% in Q1 2010. Almost half of the offshore capital in Asia flows into Japan.
Secured Capital Japan recently acquired Pacific Century Place, a Grade A office property located in the prime business district of Marunouchi, Tokyo. The 32-storey, 81,000 square metres property is one of the best known developments adjacent to Tokyo Station. The price, in excess of US$1.5 billion, makes it the largest transaction in Japan since the start
of the global financial crisis.
Foreign funds are keen to acquire prime assets in Japan. German-based fund SEB Asset Management bought a fully-let shopping centre in Chiba for US$126.7 million, while RREEF Alternative Investments acquired Frontier Ebisu, an office building in Shibuya-Ku, Tokyo, for US$51.4 million.
The REIT sector has seen some revival. Simplex REIT Investment acquired the land and building of the former Mitsukoshi Ikebukuro Department Store, owned by Mitsukoshi Ltd. (now Yamada Denki Japan Head Store) in Toshima Ward, Tokyo, for JPY75 billion.
Most of the Japanese clients who want to buy offshore assets are interested in US and Europe, while being lesss interested in emerging markets. The Japanese companies are doing their homework on emerging markets, but are not yeat ready to invest in markets like China or Vietnam, he said.
Speaking on the outlook for the world economy, he said recent research suggests that the economic data have highlighted an increasingly uneven growth pattern for the global economy as it moves from the 2008-09 recession.
The US and Japan are now decelerating following a relatively strong post-crisis bounce both economies are still growing but only slowly. In contrast, economic growth in the UK and the Eurozone has accelerated, with Germany, in particular, witnessing record growth in Q2 which has boosted confidence and underlined a new-found strength in retailing. While China is continuing to engineer a soft landing, economic growth is still in double-digits and retail sales remain strong. Brazil and India are also motoring strongly, helping to boost their retail markets.
With the world's three largest economies decelerating, the risks of a global double-diphave risen in recent weeks, but the more likely scenario is for the world's advanced countries to move into a period of sluggish growth as austerity measures kick in. Meanwhile, emerging markets appear to be in a much healthier position - they are expected to drive the global recovery, accounting for over half of the world's economic growth during 2011.
A combination of strengthening economic growth and employment prospects, returning business confidence, improved credit conditions, rising leasing volumes and falling vacancies is underpinning a revival in the Asia Pacific investment market. Land and residential property are the main investor focus, but commercial real estate transactions have also been strong in Q1 2010, up by a further 15% during the quarter and by 43% on Q1 2009. Domestic investors, many of whom have purchased for their own occupation, still dominate,
particularly in Greater China. Nonetheless, foreign funds are still keen on securing prime assets that generate stable and secure rental income.

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Interview: Mr. Oh Se-hoon, Mayor of Seoul City

Over the past couple of years, Seoul Metropolitan Government has been working to make this city a favored destination for the international business community. The city has the advantage of a highly-educated human talent pool, high-tech industrial and social infrastructure, and information and transportation networks.
Excerpts of interview with Seoul Mayor Oh Se-hoon:

>>Over the past four years, Seoul has joined the ranks of the ten most global cities in the world. This achievement was possible based on the two-dimensioned governance of enhancing the citizens' quality of life and reinforcing the city's competitive edge.
-By creating over 738,000 new jobs and building a tightly-knit social safety net, Seoul could act as a sturdy pillar for the people even in the times of global financial crisis.
-By further purifying its natural environment, Seoul has raised its citizens' level of satisfaction in life.
Seoul's atmosphere has been at its clearest since it has been observed in 1995.
By creating more cultural and leisure spaces such as green fields and water parks around the city area, Seoul has provided an opportunity for its citizens to enjoy a pleasant day out in the open air without having to go outside the city.
-Through an innovative system reform, Seoul has been able to decrease the gap in wealth between the poorest and richest sectors in the city. Four years ago, the richest sector had 17 times more wealth than the poorest sector, now the discrepancy is down to 4.5 times.
-For two consecutive years in 2008 and 2009, Seoul was voted 'the city that most people want to visit' by the Chinese, Japanese and Thai people. It was also awarded the UN Public Service Award for three consecutive years.
Seoul was a finalist for the UN Public Service Award in 2008 for its Cyber Policy Forum. It won first prize in 2009 for the Seoul Water Now System and Seoul City`s Oasis and in 2010 for its Women-friendly City Project and Hope Plus Account.
-Creativity Governance, SHift, Women-friendly City Project are among some of the thirty-plus projects implemented by Seoul over the past four years that has caught the attention of the international society. These projects have already been benchmarked by other regional governments, the central government, foreign municipal governments and private businesses.
- In particular, according to a research by the Chinese Academy of Social Sciences, Seoul's competitiveness in the international society has risen from 27th in 2006 to 9th in 2010.
However, we will not be satisfied with this. By furthering these achievements and changes of the past four years, we are aiming to turn Seoul into one of the top five global cities in the world, beloved by both its citizens and the world.
- First, in addition to the five welfare projects that were implemented since the last electoral term for those in need, Seoul will expand its welfare net comprehensively into other social areas such as education, housing, daycare, culture and health.
In the first place, as an investment for Seoul's future, we will reinforce the public education sector and a custom-made daycare system.
- By expanding parks in residential area and water parks by the Hangang, we will work to turn Seoul into an even more pleasant and attractive city.
By building parks within a five-minute walk from all residential areas and cultivating the mountainous areas within the city, we will turn Seoul into a 'city within a park.'
Also, by creating cultural and leisure spaces besides Hangang, we will open the gateway to the West Sea (Yellow Sea) and rediscover hidden values of Hangang.
-In addition, we will focus on promoting new high value-added and growth-driving industries that will support Seoul in the future such as tourism and convention business, digital contents, design, fashion, finance and R&D.
We will continue to create a global city environment where global talents can gather to live and work with passion
>In order to become a global city where foreigners want to live in, the most basic requirement would be easy communication. Plus, there should be an attractive level of services such as education, medical care, culture and public services.
Seoul's globalization project was started in 2007. For the last four years, we have strove to create a 'communication' environment and a foundation for a comprehensive lifestyle of transportation, medical services, education and culture for foreigners to enjoy without any inconvenience.
- For example, Seoul Global Center provides services in seven languages including English, Chinese and Japanese, in helping foreign citizens in their everyday life. The center helps foreigners in daily tasks such as setting up mobile phones, bank accounts, credit cards, acquire driver's licenses and extending their visas. Further more, the center provides legal counsel in dealing with tax and labor issues.
- Seoul has designated seven parts of the city as 'Global Village Zones' as they are heavily populated by foreigners. These zones include Yeonnamdong with a big Chinese population, Ichondong where many Japanese live and Seorae Maeul where the French in Seoul are usually found. A 'Village Center' is established in each of these zones, acting as a public service center for the foreigners.
- Whenever a foreigner has a question concerning Seoul, he or she can dial '120' and get answers in five languages including English and Chinese. For medical emergencies, one can dial 1339 and be given information in three languages (English, Chinese and Japanese) about the nearest hospitals and pharmacies as well as medical facilities providing foreign language services.
If we continue to implement these projects in good faith,
- Foreign investors, foreign workers, international households and foreign students will be provided appropriate service and support so that foreigners and Seoulites alike can live in the city without any great difficulties and Seoul will become a beloved global city.
In particular, in order to build a city where Seoulites and foreigners can enjoy life without any difficulties, we will provide utmost support for international households -households where at least one of the family members are originally from outside Korea- to settle down and live comfortably in our city.
>Tourism is an industry that increases income and creates new jobs like no other industry. That is why so many advanced countries in the world are so intent on promoting their tourism industry.
- Seoul is also competing with these advanced countries and cities to promote our city as a tourist destination. We have been focusing on tourism as one of our major industries and have been concentrating on city marketing and attracting tourists since the last term.
As a result, Seoul's charm as a tourist destination is growing as can be seen in the fact that it was voted the place that most people want to visit for two consecutive years in Japan, China and Southeast Asia. In January of this year, it was ranked third by the New York Times in a list of 'places to go in 2010.'
According to a survey done by Seoul, 90.4% of the foreign tourists visiting Korea have visited Seoul. Their level of satisfaction in Seoul as a tourist destination is rising every year, from 79.1% in 2007 to 91.2% in 2010.
International tourism industries are also beginning to acknowledge Korea and Seoul as places one must visit.
- In July, 2010, the Chinese Academy of Social Sciences ranked Seoul 9th in a list of competitive cities.
- From 2008 to 2009, a AC Nielson survey showed Seoul was voted by the Chinese, Japanese and Thai as the place they wanted to visit the most.
- In January, 2010, New York Times ranked Seoul 3rd in a list of 'places to go in 2010.'
- In 2010, Seoul was designated the World Design Capital and a UNESCO City of Design.
In recent years, due to efforts led by Seoul to reform the visa system, a basis to tap into the Chinese tourist market, the biggest potential market of such in the world, has been formed.
- Also, Seoul is working at the moment with the central government on a legislation to expand tourist accomodations. If this law is legislated, it will improve the situation of accomodations for the growing number of tourists, providing new accomodations for reasonable prices to tourists.
Based on these achievements, Seoul is reinforcing its marketing overseas and developing diverse high-end tourist package products such as medical tourism and conventions. On the other hand, it is expanding and educating tourism-related staff and developing digital applications for information on Seoul tourism in order to make tourists feel more at home.
- In the past, tourism was mostly about enjoyment: appreciating the nature, relaxing and enjoying leisure time. Now, it's about experience: tourists want to experience culture and history, they want to attend exhibitions and conventions and participate in high-tech events.
- Tourism is becoming more integrated with other fields such as industry, history, culture, fashion, medical care, city design and architecture. Seoul will continue its efforts to develop diverse tourism policies according to this trend.
Seoul is aiming to become the best city in Asia to do business, tourism and shopping.
- In order for tourists visiting Seoul to relax, sightsee and shop at their ease, we will increase our accomodations, exhibition and convention facilities as well as shopping centers.
- At the same time, we will focus on developing integrated tourism packages connecting tourism with all other major industries of Seoul, such as design, information technology, R&D and exhibition/conventions.
- By making use of these tourism resources, Seoul will continue to market itself enthusiastically to potential tourist markets such as China, Japan, Southeast Asia, Europe and the Americas.
>Seoul is working in close cooperation with the central government in actively implementing its low-carbon, green growth policy. It is leading various related projects that are appropriate in the city's particular situation.
Enhanced achievements through an effective implementation of the central government's green growth policy.

-About half of Seoul's buildings are over 20 years old, meaning that there are a lot of energy being wasted. (Buildings take up 60% of all the city's energy consumption and 64% of the city's gas emission.) That is why Seoul is implementing a Building Retrofit Project(BRP.)
Since 2008, this project has been implemented first in the city and district government buildings and other public buildings. Similar projects in the private sector are being endorsed through a loan.
> By 2009, BRP on 76 public buildings and 50 private buildings, a total of 126 buildings were completed.
> The goal by 2010 is to implement this project on 18 firehouses and 100 private buildings.
At the C40 Summit Meeting held in Seoul last year, Seoul announced BRP as its representative project and the Clinton Climate Initiative (CCI) designated Seoul as a leading city in BRP.

-Lighting takes up 21% of Seoul's entire energy consumption. By distributing LED lighting, which has a longer life and higher energy efficiency, Seoul is trying to reform the lighting situation.
In hand with the central government's LED lighting plan (to equip 30% of the public buildings with LED lighting by 2012 and 30% of private buildings by 2015), Seoul is planning to equip 100% of its public buildings with LED lighting by 2020 and 80% of the private sector by 2030. It is also encouraging the use of LED lighting in new construction and BRP projects.
> A total of 18,333 lights in both government and private buildings have been changed to LED by 2009.
> By 2010, 6,963 lights from 14 buildings are to be changed to LED.


- Seoul is concentrating on supplying hydrofuel, solar and geothermal powers as appropriate new and renewable energy sources for the city. (The city's usage of new and renewable energy was 1.7% in 2009). Through policies such as making renewable energy usage compulsory for big energy consumers like buildings, Seoul is hoping to increase its renewable energy usage to 3.5% by 2014.
By 2009, solar and geothermal power is being distributed to 116 buildings.
Seoul is concentrating on hydropower, which is seen as appropriate for densely populated areas like the city. In May, 2009, it build the Noweon Hydrofuel Station of 2.4MW scale and in this September, it will build another 2.4MW sized hydrofuel station within the World Cup Park.
Also, in accordance to the central government's '1 million Green Home' project, Seoul will encourage households to use private hydrofuel batteries, bring the number of such households to 100,000 by 2030.
In particular, the 11,353 households in the Magok Development District are to get 56.5% of their energy from biogass, hydrofuel and reused resources.



-There is a simple, immediate and effective way for green life to take place without additional facilities or technologies. It is for citizens to voluntarily save energy, water and gas. Seoul has been implementing the Eco-mileage System since September 2009. This is an incentive system that pays the citizens back as much as the greenhouse gas emission they've worked to decrease.
By the end of this August, a total of 290,670 establishments (270,270 households and 20,400 organizations) were participating in this system and Seoul is trying to get 1 million establishments to participate by 2014.
In the future, buying eco-friendly products and using public transportation will also earn participants mileage points and these points will be used as cash when using public transportation or public cultural facilities.
Seoul style Green Policy


-In order to combat air pollution and climate change, Seoul is leading the way in distributing eco-friendly green cars. It is working towards the central government's aim to become one of the world's fourth largest green car nations and for the four years of the mayoral second term, Seoul will provide 30,000 green cars and 8,000 charging stations around the city. To encourage citizens to use green cars, Seoul has recommended the central government to provide financial support to households buying green cars and businesses establishing charging stations.
Groundwork for a Neighborhood Electic Vehicle(NEV) to take to the streets has been completed by this April including designating roads for possible passage.
25 NEVs are currently being used park patrol cars and public vehicles.
Development on electric buses has been completed in partnership with the manufacturer to the stage of test driving in this June. Fifteen of these buses will be operating by the end of this year and 53 charging stations will also be established for these buses.
Work on electric cars, hybrid buses and electric taxis are also undergoing.
228 models of two-wheeled electric vehicles with low levels of emission will be distributed by the end of this year for demonstration and if yielding positive results, 50% of motorbikes used for delivery in the city will be replaced by these vehicles by 2014.



-A voluntary program where citizens are encouraged to leave their vehicles behind for one designated day a week has been implemented to save energy.
About 76% of Seoul's air pollutants and 27% of gas emission comes from vehicles.
The No Driving Day program is a voluntary program as never found in a city before. It was started in July 2003 and some 1 million cars (about 40% of the relevant cars in Seoul) are participating in it.
The central government has also acknowledge its effectiveness and is expanding it to other cities around the city with a population larger than 500,000 from 2011.



-In order to reuse the metal resources from disposed household electronic appliances and to dispose of the appliances in an eco-friendly manner. Seoul has started a 'City Mining Project' business since June, 2009.

Since the creation of a SR Center last December until this August, 1,572 tons of disposed household appliances and 426,000 mobile phones were treated. This center also created 61 new jobs, 49 of which went to the social needy.
After Seoul's example, the government cabinet meeting decided to establish a similar plan in August, 2009 and a plan to reuse disposed metal resources was established this March by the Ministry of Environment. The Ministry of Public Administration and Security also set up a "Regional Plan for the Reuse of Disposed Metal Resources" and have cited Seoul as an example to cities around the country.



In order to teach the importance of environment conservation to elementary school students, the future generation of the city and to expand a lifestyle of low-carbon and green growth, Seoul is developing and distributing education courses and textbooks according to the age level of children.
Since 2009 to this September, Seoul has developed an education booklet according to the syllabi of all grades in elementary school called "Let's Create a Green Seoul together with Hwani and Gyeongi." This booklet has been distributed to all 1st to 4th graders in elementary schools in Seoul (420,000 students in total).
As of now, textbooks for 5th and 6th grade are being developed and by 2011, all grades of elementary school will receive education in taking care of the environment.

Seoul will continue to cooperate with the central government, civic society and other partners to achieve a synergy in the implementing of green policies.
>>Seoul is exempting foreign businesses from national and regional taxes up to a period of 10 years. It is also providing these businesses with government-owned land for a low cost either for sale or long-term rent. Foreign businesses are also provided with financial support in hiring and educating employees as well as research. Seoul is also providing a long-term loan for investing in facilities. It is creating a new fund of 200 billion won (18 million USD, 13 million Euros) for foreign invested businesses and working improving related systems and regulations.
-In order to improve the life quality of foreign investors and their families living in Seoul, Seoul is continuing to invite famous, private schools from overseas, such as Dwight School, to set their campuses in Seoul. Seoul is also building rental housing for foreigners and medical clinics for foreigners. It is also setting up announcements in foreign languages in public transportation as well as signboards for foreigners on the streets. All in all, Seoul is trying to make itself a city where residing foreigners will have no problems in education, housing, medical care, transportation and all other areas.
-In particular, Seoul has set up Global Center in major parts of the city where foreigners can visit to get consultations and solutions to the problems they encounter as they live in the city. There are over 10 Global Centers in Seoul as of now where foreigners can go to ask advise on various fields such as living in Seoul, tourism and business. Seoul is planning to expand the number and functions of these global centers in the near future.

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