Interview: Mr Rong Ren, Managing Director & CEO, Harvest Capital

Currently managing about $1.8 billion in five funds and generating returns of over 20% IRR, Harvest Capital Partners brings together an unparalleled cross-border and cross-disciplinary team of property investment professionals. With the backing of its majority owner, it is uniquely positioned to identify and capitalize on prime and off-market transactions in China’s dynamic property development market.
The company was named “Asia Firm of the Year” by PERE magazine in the Global PERE 2010 Awards and "Property Investor of the Year - China" by The Asset magazine in the 2010 Triple-A Investment Awards. These awards are among the most prestigious accolades for the global private equity real estate industry.
Mr Rong Ren, Managing Director & CEO, Harvest Capital, spoke to us about the company’s goals and his perspective on the Chinese property market.

Could you give us a brief background on your company?
Harvest Capital Partners is a boutique investment firm that specializes in real estate investment funds focused on Greater China. We have a solid track record in the full property investment cycle, from raising capital and developing properties to managing these assets, exiting from our investments and returning capital. We are one of the few China real estate investment managers that can say that we’ve delivered 20% IRRs for our investors since 2006.
The approach we take is based on a disciplined investment model, incorporating an absolute return, value-driven strategy, to achieve medium- to long-term capital appreciation for investors. What makes us different is our hybrid-business model, in that we not only invest capital but also get actively involved in developing and managing properties. This allows us to add significant value to our projects, which we would not be able to do if we were simply passive investors.
Our portfolio of real estate funds is focused on selected regional cities, which have a large population base, high economic growth and rapidly increasing per capita disposable income.
Based on these criteria, we invest in the Bohai Gulf Region, Yangtze River Delta, Shandong Peninsula, and the Pearl River Delta, including Hong Kong. We are committed to creating maximum value for all of our investments by providing expertise from land acquisition, project development through to asset and portfolio management.
Our investments cover a focused array of asset classes, covering residential and retail properties, office buildings, hotels and serviced apartments. Specifically, we target assets that are unique either in terms of location or where significant value can be created and enhanced through refurbishment, repositioning, development or redevelopment, thereby capitalizing on the strong demand for asset dispositions in China.
Another strong advantage we have is the full support of China Resources Group, which gives us unparalleled access to a strong network in both first and second tier cities in China, where demand is fuelled by urbanisation and strong fundamentals in a rapidly growing economy.
Our entire team is passionately committed to these principles, and we all take our fiduciary responsibilities to our LPs very seriously. Being a member of ANREV is also important as it helps us pursue best practices in the funds management industry and increase transparency for our LPs. We manage capital on behalf of others, so we understand the need to manage our investment risks carefully in order to achieve the best possible returns.

What is your investment strategy and what asset classes do you think are providing the most promising returns? What cities have the biggest upside potential?
It is sometimes misleading to think of China as one market. Depending on our investors' risk appetite, investment horizon and objectives, we look to tailor specific investment strategies for them.
For example, while there is a lot of media attention on the government’s efforts to cool down the residential market, we feel this is a good time to invest. Various developers are facing liquidity constraints because of the government measures, and we are starting to see good deal flow in the residential sector.
Based on our market read at this point in time, we are looking at:
Mid-market retail in Tier 2 and Tier 3 cities in China, which are benefiting most from the urbanization trends and supported by strong retail consumption
The affordable housing sector, which is currently being supported by governments at all levels
Selected office investments in Tier 1 and Tier 2 cities, which will benefit greatly from the increasing long term capital that is emerging in China's capital markets
Selected mixed use developments on an opportunistic basis, and
Guaranteed yield products backed by high credit quality developers.
So as you can see, the opportunities and deal flow in China remain strong and Harvest Capital is well placed to continue to offer our LPs — both foreign and local — investment opportunities that fit their risk appetite and investment objectives.

There is an on-going debate among industry experts on India versus. China. What are the major differences?
We're not qualified to comment about the opportunities in India, as our mandate and expertise is primarily in China. I'm sure both countries offer excellent opportunities as their overall demographics are quite similar.
However, based on discussions with investors, I see one key difference being the Chinese government's efficiency in planning and encouraging a sustainable investment market through clear regulation, building infrastructure that supports property investments, and establishing a market environment conducive to making a decent return.
The government coordinates its planning very well and makes it easy for investors in China to see its intentions. For example, this year's 12th five-year plan is quite clear about social development, stimulating domestic consumption, reducing the income gap, promoting environmental awareness and increasing the value of China's industries. Hence, as an investor in this market, you can anticipate what strategies are sustainable over the coming years and plan accordingly. I think that's a huge advantage.

There is a stiff competition among foreign and local fund managers try to raise capital for China. What sets you apart from other players?
The Chinese market is full of opportunities, if you know where to look. There is also plenty of room for competition, which we feel is good for the development of the market.
Harvest Capital is different from most private equity real estate players in the market as we are truly local. Being part of the China Resources Group, a State-owned Enterprise, also has its advantages. Our networks and pipeline of opportunities are genuinely deep. All of our investments are sourced off-market, and our key focus is to buy into investments at a reasonably low cost. What’s more, having an extensive footprint in the country gives us access to proprietary research and information not available to others.
As a local player, China's real estate market is not opaque to us and we are able to make informed decisions when we assess investments in different cities. Another key difference is that we have a hybrid business model with significant asset management capabilities. We're not just a financial investor.
The team at Harvest Capital is also very experienced, bringing together both local and foreign expertise within an international best practice framework.
All of these factors resonate with our investors and the industry, which I think accounts for us receiving the award from The Asset magazine and being the first Chinese firm to win Asia Firm of the Year at the Global PERE Awards.

What are the best market entry strategies as a foreign investor?
I think some investors underestimate the partnership risks in China. We advise anyone looking to invest in China to find a suitable local partner. China is still a market that requires significant local expertise, due to the general lack of transparency and the sheer geographical scale.
It remains challenging to invest directly in China but having a good local partner will help smooth over "local" issues. Even more importantly, investors should look at China as a long term investment destination.
At Harvest Capital, we try to build long-term relationships that add value to our partners in numerous ways, such as utilizing our asset management capabilities to increase returns. We can also bring our networks and relationships to the partnership, such as tenant relationships, government relationships or banking relationships. Essentially, we can act as a "bridge" between our investors and China, and our LPs can look to us to manage the local risks as best as we can, leveraging on our expertise to deliver the best possible risk adjusted returns.

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Eating Live Octopus in Korea

Check out this video...
I have not had the courage to try it out so far!!!

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Foreigners in Korea: Koreapass is giving free 50,000 won shopping cards!

Want to get a free 50,000 won shopping card? If you are a foreigner, living in Korea for less than a year, hurry up and apply to Koreapass.
As this article notes:

One hundred foreign residents here will be selected this month to become monitors of ``Korea Pass,’’ a prepaid card designed for foreign tourists, as part of the Korea Tourism Organization’s (KTO) efforts to promote its use.
If selected, foreigners will be given a 50,000-won ($45) prepaid card from the state-run tourism promoter and be allowed to spend the money at department stores or other hospitality-related businesses of their choice. All they have to do is to fill out a one-page questionnaire later about their shopping experiences.
KTO is accepting email applications from those who are interested in becoming monitors at koreapass@knto.or.kr through March 13. An application form can be downloaded at www.koreapass.or.kr [NOTE: JUST LIKE ALL KOREAN WEBSITES, YOU CAN ACCESS IT ONLY BY USING INTERNET EXPLORER! NO WONDER THE NORTH KOREANS ARE ABLE TO REGULARLY HACK THEM!]

Those selected will receive the card by March 18 and spend the money through March 31. Monitors will then be required to submit a questionnaire by April 8.
Card users can receive up to 30 percent discounts at department stores, tourism spots, museums, theaters and restaurants in Seoul and Busan. They include Chongdong Theater, Lotte Mart, Seven-Eleven, Angel-in-us Coffee, Lotte Duty Free, T.G.I. Friday’s and TomaTillo.

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Interview: Mr. Lee Jung-whoon, General Manager, Finance & Investment Dept., Korea Asset Management Corporation

has been making contributions to the national economy by helping overcome crisis and develop the economy through various supporting measures for the financial industry.
Nonperforming loans (NPLs) were at the heart of the financial crisis that engulfed the Korean economy during 1997–98. The recovery has also been characterized by a rapid and drastic reduction in the level of NPLs in the financial system.
The government played a leading role in financial and corporate restructuring, including strengthening the legal and regulatory framework, injecting public funds, and reinforcing the functions of nstitutions for crisis management, such as the Korea Asset Management Corporation (KAMCO).
KAMCO played an important role in facilitating the restructuring process and helping to develop financial markets. First, KAMCO purchased distressed assets from banks and other financial institutions, which allowed lending to resume at a time when liquidity was scarce. This objective was complemented by increased supervision to ensure that banks were operating on sound commercial principles.
Second, KAMCO’s resolution of NPLs contributed to the good progress made in Korea in recovering public funds injected by the government for financial sector restructuring. In addition, KAMCO disposed of many of these distressed assets through a number of innovative methods, including by issuing asset-backed securities (ABS), which launched an important new market in Korea.
Mr. Lee Jung-whoon, General Manager, Finance & Investment Dept., KAMCO, speaks about the crucial rope played by the organization and its role ahead.

Could you give us a brief introduction to KAMCO?
Since its inception in 1962, Korea Asset Management Corporation has been making contributions to the national economy by helping overcome crisis and develop the economy through various supporting measures for the financial industry.
During the Asian Financial Crisis in 1997, the national economy was facing the Asian economic crisis. In order to efficiently resolve non-performing loans (NPL) of financial institutions, KAMCO formed the NPL Resolution Fund of 39 trillion dollars, and acquired 111 trillion won of non-performing loans. And since 2009, with a view to proactively coping with global financial crisis, KAMCO has been operating the Restructuring Fund, as a full-time organization for restructuring process.
In addition, KAMCO is in charge of government-commissioned work such as state-owned property management, collection of overdue taxes, and assistance for consumer credit recovery. After the incumbent CEO Young-chul Chang took office, we categorized domestic properties into three: state-owned, financial, and credit properties. KAMCO is trying its utmost in managing all three categories as a comprehensive asset manager of the properties owned by the Korean government.
What is the performance of the NPL Resolution Fund and the Restructuring Fund like?
Using the NPL Resolution Fund, we collected 6.2 trillion won additionally to the amount of public fund invested, by acquiring non-performing loans of the face value of 111 trillion won and resolving 71% of them up to now.
In this process, we also converted some of the non-performing loans into equity, transforming them into blue-chip companies and selling them in the market. Some noticeable examples include Daewoo Heavy Industries & Machinery Co., Dongah Construction Industrial Co. Ltd., and more recently sold Daewoo International.
With lessons learned from the Asian economic crisis, we were able to proactively deal with the recent global financial crisis, by early establishing the Restructuring Fund. Since 2008, we have purchased PF bonds of 8.5 trillion won, swiftly and actively responding to the destabilizing factors of the financial market. In order to support shipping industry in liquidity crisis, KAMCO formed a shipping fund, having purchased 27 ships (worth of 860 billion won) so far.
We understand that your department is responsible for KAMCO’s overseas business. What are the progress and future plans?
KAMCO’s overseas business was launched with the mandate of assisting private sectors in overseas market creation and creating future growth engines of KAMCO, utilizing various domestic and international networks and experiences learned from the post-crisis process of resolving 111 trillion worth of NPL and performing corporate restructuring.
Investment preparedness provided through the revision of law to enable direct investment between 2005 and 2006 triggered full-scale implementation of the overseas business.
In the first round, in 2007, KAMCO acquired properties from a Chinese state-run AMC, followed by the successful investment brokerage in 2008. Afterwards, KAMCO established a local AMC with dispatched staff, and has been in full operation for management and collection.
Our view on the market indicates that, after the global financial crisis, it is high time for us to enter the NPL markets of advanced countries including the US. We are thus currently cooperating with domestic and overseas institutions to screen blue-chip investment grade targets.
This year has goals of exporting KAMCO Model, which is business knowhow accumulated through our on-going training and consulting business for developing countries, and successfully implementing pilot deals of investing in NPL in advanced countries such as the US.
Does it mean that KAMCO is also offering training for overseas institutions?
Yes. Since 2001, we have been providing training courses on our knowhow of NPL resolution and restructuring process, accumulated through overcoming the Asian economic crisis, for many governments such as China, India and Vietnam.
A total of 22 rounds of training courses have been completed, with a purpose of maintaining close relationship with organizations of other countries. In addition, we have concluded MOUs with 17 government organizations from 11 countries, contributing to the heightened international status of KAMCO.
Recently, local pension funds have been showing great interest in US real estate market, with some investment projects already initiated. What is impressive is the speed of the movement by public corporations. Do you have any experiences in the US market? What are they about?
There has been a series of prospects that says the US market shows a sign of recovery starting with the corporate sector, as recently seen in the continuous increase of corporate fixed investment. Both IMF and many IBs are competing in upwardly adjusting future economic growth rate assumptions.
However, a general consensus of the international financial community is that it will not be easy for a huge market like the US to recover in a short period of time. Examples include the increasing non-performance of commercial assets and continued bankruptcies of small-and-medium-sized banks.
KAMCO has also been monitoring the US market for investment ever since the financial crisis, with some cases almost striking the contract. But basically we are still focusing on risk management based on conservatism.
For example, it was in 2008 when we were conducting a preliminary underwriting for the purchase of a 450 million dollar portfolio owned by a global IB, reaching the stage of price negotiation. It was late August. The seller insisted that the asset price was almost bottoming out, but our underwriters said that there would be further dip of about 15% or more. Obviously, the deal was not possible to be closed.
After the failure of negotiation, our underwriting team backed out. And on the 15th of September, Lehman Brothers declared bankruptcy, suddenly elevating the financial risks all around the world, ultimately causing steep rise of foreign exchange rates in Korea and aggravating the investment environment.
So, it turned out to be a good thing that you had to break the deal?
Sure. The asset value was plummeting afterwards, as we had anticipated. And the foreign exchange rate increased by almost 50%. Even if the price was successfully negotiated, it must have been difficult to close the contract.
That was a very clear example of risk management. Also in 2009 and 2010, we had some cases of reaching the point of price negotiation, but we had to use our conservative stance again, believing that there was a possibility of further price drop.
Could you explain the nature of the investment business of KAMCO?
Our target focuses not only income generation but also assistance for the private sector in their overseas business. To do the latter, we are informing Korean institutional investors of high-grade investment targets and helping them with asset management.
Of course, to lead the overall deals, we also need to make some investment at the threshold level. We are also planning to establish JV-AMCs with local organizations, through which we can learn the systems of the countries to be invested and accumulate asset management knowhow. In China, where we had two deals closed, we have already established an AMC, gathering information on local investment systems and grasping the knowhow of asset management.
I am not saying that investment yield is not important. What I mean is that it is an important point of consideration that the intangible assets also need to be acquired at the same time. Domestic pension funds are also welcoming the business structure in which KAMCO participates in overall asset management.
The investment business will start from small-scale projects in advanced countries where the cycle is widely believed to be bottoming out. After making successful investment, we will expand the scale by phase.
First, we plan to start with selective high-grade investment targets out of troubled assets such as NPL or REO owned by local financial institutions. Currently, with a view to acquiring assets under bulk sale by FDIC, we are currently under joint consultation with an organization with successful bidding experiences.
There must be some difficulties experienced by a public corporation like KAMCO in dealing with IB business.
KAMCO has amassed a high international credit standing and credibility with fair business treatment, which are great advantages of our actual implementation of projects.
Currently, we have some difficulties in proactively exploring potential high quality projects, because of the limitation posed by the KAMCO Act, which stipulates that investment targets should be confined to the NPL Resolution Fund. However, we are planning to expand the target investments to the Restructuring Fund by amending the act.
And the issue of relatively long decision-making process as a public corporation could be substantially overcome by sharing roles with private counterparts.
Do you have any parting parting comments for our readers?
According to the IMF estimation, the total loss incurred by financial institutions worldwide amounts to 4,000 trillion won, with US and European markets alone at 2,000 trillion won.
When it comes to NPL markets of advanced countries, the barrier of entry used to be too high in the past. But, in a couple of years ahead, it is expected that opportunities will come for us to purchase high-quality assets at lower price. That might be a once-in-a-life-time chance, though.
We will do our best in actively and fully utilizing various experiences and rich networks of KAMCO, rather than neglecting them, so that KAMCO can be leading liquidity in the private sector toward more stable investment targets, thus contributing to the national wealth creation. This, I believe, is the true mission given to a public corporation.

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Interview: Mr. Richard Han, Managing Partner, Vestas Investment Management

Vestas Investment Management is a newly licensed Real Estate Fund management company authorized by the Financial Services Commission in September 2010.
In January, Vestas Investment Management announced that it has commenced capital raising for Vestas-Meritz Korea Real Estate Fund I . Vestas and its co-GP partner, Meritz Securities are participating for capital raising and fund targets country focused, core plus/value added and cyclical opportunities in the Seoul office sector. The Fund considers foreign pension fund/ fund of fund type investors with selective local pension fund investors with raising amount of USD 200~300 million.
Vestas is newly licensed Real Estate Fund management company authorized by Financial Services Commission (FSC) in September 2010. Key senior executives including Mr. Richard Han, Managing Partner, mostly joined from Macquarie Real Estate Korea (wholly owned subsidiary of Macquarie Bank) and other foreign private equity funds management company, where the team implemented global standard in investment, asset management, and divestment for past 10 years in Korea.
In an exclusive interview, Mr. Han speaks about the company and his plans for the year.

Could please you give us a background about Vestas Investment Management?
VIMC was established in 2010 and authorized by Financial Services Commission(FSC) as a licensed Real Estate Fund (“REF”) management company. Most key senior executives joined from Macquarie Real Estate Korea (a wholly owned subsidiary of Macquarie Bank) and other foreign private equity funds management companies with previous experience from several local and international groups such as JLL, Deloitte, and Daewoo.
I was managing director of both Macquarie Real Estate Korea and Ostara Korea Fund where I established a local team and built up 1.7 trillion won asset value of portfolio with current team. All transactions were high profile deals traded among major institutional investors and private equity funds such as RREEF, GE Real Estate, Lone Star, National Pension Service (NPS), and Samsung Life. Key transactions included acquisition of SK Securities, Tong-Yang Securities, and Daewoo Securities Building, Kukdong Building, ING Tower, Smart Plex, Pantech New HQ, and K1 REIT building and current team was leading the whole transactions from deal origination/execution, asset management and divestment.
Key milestones among these transactions include introducing first foreign managed CR REIT with underling asset of Kukdong building and two REIT establishment for National Pension Service where NPS invested 500 billion won of equity.
Vestas established global standard practice from previous foreign employers such as high standards of investment discipline, transparent governance, alignment of interest with investors, and reporting system. Capability to implement global standards for real estate investment and management is the key strength which would differentiate Vestas from other local fund managers.
A strong locally experienced real estate team with proven country and sector focused investment track records will be the key driver to source and execute private/off market transactions ahead of other players in the market and Vestas seek risk adjusted returns for our clients by carefully assessing potential investment opportunities and actively managing portfolios.

Where do you see the investment opportunities in Korea for 2011?
Korean real estate market is no longer an emerging market and it is now entering the stage of a stabilizing/mature market where investors should expect relatively lower return with low risk. Nevertheless, the market would look attractive to investors seeking stable yield with some capital appreciation.
We assess commercial office building sector to be still attractive (1) most liquid and (2) largest real estate holdings in a typical Korean company’s balance sheet. Some development type office take-out projects where developers having financial difficulties to continue and complete could be potential investment opportunities. Retail sectors could have opportunities where big discount store operators have an appetite for sale-lease back type divestment of existing assets for their continuous expansion requirements. Stable yield backed by quality credit of operators will provide investment opportunities.
When the market is tightening and investors have difficulty to find out attractive deals, that does not mean investors will not get attractive deals in the market. There are fund managers in the market who have hands-on experience and who have the capability to source and execute potential deals ahead of other players in the market. As long as investors assess the Korean real estate market to provide stable yield generation opportunities supported by strong fundamentals of the economy, the country should still be considered for future investment allocation.

How do you compare Korea with Japan, China, Hong Kong, Singapore? Why should foreign investors invest into Korea?
As just mentioned earlier, even when the Korean real estate market is tightening and therefore can’t enjoy high returns as was the case of 3~5 years ago, Korea still has its competitiveness compared with other Asian countries. I would like to limit my comments to the commercial office building sector.
First, fundamentals of Korean economy are strong and stable compared with other Asian countries with constant 4~5% GDP growth even after the global financial crisis. Second, many investors always consider Japan or China first in Asian Market in terms of capital allocation mainly based upon market volume with some other factors. In fact, China is still a growing market but it is also understood that investors should not ignore transparency/consistency in government policy and potential bubbles. Although all the investment environment of Japan might be more open to foreign investors and we see a lot bigger transaction volumes compared to other Asian countries, current slow economic situation would not make it easy to justify any investment commitment. In that sense, Korea has a very transparent investment environment with predictable/ stable income generating asset pools, although the target return is getting lower. Third, even though many investors are concerned about vacancies due to scheduled increasing supplies in Seoul market, this could generate buying opportunities in return as there could be pressured sellers. Historically, Seoul office market vacancy has been so low and stable and even when vacancy increases due to increasing supply, we don’t expect to see dramatically rising high vacancies like 20%~30% as some other Asian countries experienced before. In the case of total occupancy cost, Seoul grade A office still ranks lower than other major cities such as Tokyo and Hong Kong.
To conclude, I would like to say that as long as fund managers are more creative and more proactive ahead of other players based on hands-on local experience, there are good investment opportunities where superior risk-adjusted returns could be achieved. In particular, if investors are interested in stable yield generation with some capital appreciation, the Seoul office market is still attractive to investors.

Why are there only two Korean country-specific funds so far in Korea?
Although there are quite a few Pan-Asia regional type foreign managed funds, there are only two country focused private equity fund managed by foreign managers in the market. When most Pan Asia funds were raised, I understand Korea always has had relatively lower weighting in terms of capital allocation and fund managers did not have interest to launch country focused funds.
Having said that, if you look into Korean real estate market, when the market was open to foreign investors in late 1990s after the Asian financial crisis, real estate investment market grew substantially and now we see active investment grade /institutionalized transactions. In addition, based upon many transactions led by foreign investors, global standard practice is now quite common in Korea.
Even if many regional funds could still cover Korea for future investment, it could be more effective to have country focused fund managers to implement transparent and sophisticated investment management when real estate investment business anyway should be locally driven in various aspects. Many pan Asian type regional funds also happened to reduce or shut down their presence and operation in Korea recently due to restructuring after the recent financial crisis and it could be a good opportunity for investors to consider country focused funds and enter the Korean market.
In particular, when selective local fund managers now have hands-on experience with proven track record and when these fund managers can implement global standards for investment and management, we should see more private equity fund type business opportunities in Korea.

Why is Vestas trying to introduce a private equity fund business model in Korea (targeting not only foreign LPs but also local LPs) when most local fund managers just raise capital from local investors on a project basis when the deal is secured?
Many local fund managers know private equity fund business model is quite effective and competitive because fund managers can secure certain deal ahead of other players when there is committed capital from investors. Nevertheless, most local fund managers didn’t explore this type of business model for several reasons. First, local investors don’t prefer to commit in the blind pool type private equity fund and therefore local fund managers have not explored this business model with local investors. Second, most local fund managers do not have experience working with local or foreign investors in the form of private equity business model, either.
As far as local investors are concerned, it is a matter of how fund manager could give comfort to them in relation with investment decision making process when local investors are not used to giving discretion for investment decision to fund manager in the blind type fund. Vestas has some creative ideas to resolve this with potential local investors and that is why Vestas would like to challenge local investors’ commitment into private equity fund.
In addition, local investors would be more serious in this type of blind pool private equity fund if they see credible foreign LPs committed in the fund. We also understand many local institutional investors have ever increasing appetite and need to outsource their funds management to third parties as is the case in many developed countries in line with increasing demand for alternative investment (in particular real estate) allocation. Many institutional investors realize they cannot manage their portfolio in house with limited specialized professionals forever.
Vestas have built up strong global standard practice know-how to manage private equity fund business. In that sense, we are ready and open to any local or foreign potential investors for potential private equity fund management business opportunities in Korea. We should challenge more opportunities to introduce foreign investors and local investors into this type of business structure which could be mutually complementary and beneficial to local and foreign investors.

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Two Valentines Days in Korea

So yesterday was Valentine's Day....but things happened a bit differently here in Korea. If you must know, unlike in other countries, in Japan and Korea, Valentines Day is for girls to buy gifts for the guys. The guys turn falls in March, when they have to return the favor.
So there are effectively 2 Valentines Days!!! These marketing guys are really innovative. They have set aside different days for celebration, almost one a month for a variety of excuses.
As this news report points out:

Jan. 14 - Diary Day
On Diary Day, lovers and friends give one another day planners, which is symbolic of a fresh start to the year. Girlfriends also encourage boyfriends to record their special days together.
Feb. 14 - Valentine’s Day
Korea’s version of Valentine’s Day was imported from Japan after a Japanese company cleverly carved out White Day from Valentine’s to create two days in which they profited from greeting card and chocolate sales. On Valentine’s Day, it is the woman’s responsibility to buy chocolate for their significant others.
March 3 - Samgyeopsal Day
March in Korean is written as the number 3, pronounced “sam,” which is the same as the first syllable of samgyeopsal, or pork belly. Started in 2003, this is the day where people go out to eat pork belly.
March 14 - White Day
On this special day, it is men’s turn to return the favor to the women who have given them chocolate on Valentine’s Day.
April 14 - Black Day
Those who failed to be the beneficiary of love on Valentine’s Day or White Day have Black Day to fall back on. On this day, singles gather to eat jajangmyeon, which is a black noodle dish at Chinese restaurants.
Grape Day / Diary Day /Rose Day
May 14 - Rose Day
Another marketing scheme, on Rose Day lovers are supposed to present each other with a bouquet of roses, as May is the month when roses blossom. The day is promoted by florists and amusement parks, who try to lure young customers with the onset of spring.
June 14 - Kiss Day
Not related to any business, Kiss Day is pretty self explanatory.
July 14 - Silver Day
Young couples exchange silver rings - known as “promise rings” - on Silver Day. Interestingly, more couples introduce each other to their parents on this day than any other.
Aug. 8 - Grape Day
Grape Day is relatively unknown compared to other days since Nonghyup began promoting Grape Day in 2008 to raise grape sales. Also, “August” in Korean is the same as the number 8, which resembles a bunch of grapes.
Aug. 14 - Green Day
This day is designated for lovers to enjoy the beauty of nature. For those flying solo, Green Day is a day to ease loneliness by drinking soju, which is sold in a green bottle.
Sept. 9 - Googoo Day
Created by the Ministry for Food, Agriculture, Forestry and Fisheries, Googoo Day (Chicken Day) is intended to promote chicken consumption. In Korean, the sound of a chicken is “googoo,” which is the same as the pronunciation of the number 99.
Black Day /Samgyeopsal Day / Kiss Day
Sept. 14 - Photo Day
Lovers, friends and family celebrate this day by taking pictures outdoors.
Oct. 4 - Cheonsa (Angel) Day
In Korean, the number 1,004 is pronounced “cheonsa,” which sounds the same as the Korean word for “angel.” On this day, non-profit organizations encourage people to do volunteer work and make donations.
Nov. 8 - Bra Day
On Bra Day, men are supposed to buy brassieres for their girlfriend or wife. They say the numeral 11 resembles the strings on a bra, and when “8” is flipped on its side, it resembles a bra.
Nov. 11 - Pepero Day
While many of these days are altogether ignored, Pepero Day is one of the most successful (from a marketer’s standpoint). Pepero is a brand of chocolate-covered cookie first made by Lotte.
Legend has it that Pepero Day started in the 1990s among middle school girls in Busan in the hopes they would become as slim as a stick.
Nov. 14 - Movie Day
Movie Day was established by movie companies to encourage people to go to the theater.
Dec. 14. - Hug Day
This is a day when people hug one another to share the spirit of love. Its origin is unknown.

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Korean restaurant in Delhi looking for business partners

I received the following emails a while ago. An Indian hotelier plans to open a Korean restaurant in Delhi and is looking for a business partner (Korean.
The first email:

I needed your help to find a company or persons who may be interested in running a Korean Restaurant in New Delhi, India. The location is already set up as a restaurant and has some Korean kitchen equipment available in terms of kimchi fridge, bar b q tables, burners from Korea etc. Also pots and and pans are available.
The location already has a local government license to run as a restaurant and also has a liquor license available. The restaurant has seating for 45 plus a basement which already has the Korean style rooms made.
Currently in New Delhi there are 3 Korean restaurants of which only Gung the Palace is doing extremely well. Of the other two one is located in a 5 Star hotel and thereby is quite expensive and the quality is not so good. The last one has poor food quality and therefore not doing well.
My location is located near the diplomatic area and also has a huge expatriate population living in the neighbourhood; comprising of Europeans, Americans, Japanese and Koreans.
I am already running other restaurants in New Delhi and very familiar with running a restaurant. I am looking for a JV/partnership with a Korean company or person who wants to move to New Delhi for this business opportunity. The sales expected for the Korean restaurant are around Rs 35lakh - Rs 40lakh/month (USD 80,0000 - USD90,000 per month).

Another mail with details:

Let me give you a gist of the concept of the JV I envision : The Korean Partner will be responsible for ensuring the quality of the food so that it meets the authentic tastes & standards of the Korean clientele. They will also be responsible for networking in the Korean community in New Delhi to bring in business for the restaurant. There is a financial aspect of the deal as well but we can discuss that later.
My role essentially will be providing space , certain staff to manage the government required book keeping and also provide purchasing efficiencies to the partner. I will ensure compliance with all the local legal requirements needed to run the restaurant.
The restaurant will be catering to only Korean/Japanese people, other expatriates interested in eating Korean food and some Indians who may come in as guests of the Koreans who will visit the restaurant.
In terms of beef/pork , both are being imported and being sold in the Korean restaurants already present. There are also Korean supermarkets where beef is available.There is an issue with the beef but its being "managed". Soju is already available in my restaurant.
The most important issue is the ability to deliver quality food and network in the community. Even yesterday a fellow hotelier informed me that a tour company was looking for authentic Korean taste place and they have 35 groups that they can provide in a season.
My only request is that preferably I would like a person who can speak at least basic English as that really helps the dynamics and will also also make the business relationship easier.

If any Koreans are interested, do drop me an e-mail and i will give you the contact details.

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Rest in Peace

Eunmi's father has left this world for the next.
May he find happiness wherever he goes!

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Aging process of Korean women...it's true!!

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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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