European Institutional Investors See KOSPI Outlook: "Still Undervalued"

"As Long as the Supercycle Continues, the Market Will Climb Further"
"Logistics and Gangnam Office Buildings Also Offer Strong Real Estate Prospects"

DWS Asset Management, an asset management company under the Deutsche Bank Group, forecast that the KOSPI will continue its upward trend as long as the semiconductor supercycle persists.

(From left) Tae Young Lee, Head of DWS Korea; Johannes Muller, Global Head of Research; Clemens Schaefer, Global Head of Real Estate for Asia-Pacific, Europe, Middle East, and Africa, are speaking at a press conference held on the afternoon of the 29th in Yeouido, Seoul. Photo by Seungwook Park

Johannes Muller, Global Head of Research at DWS Group, stated at a press conference held in Yeouido, Seoul on the afternoon of June 29, 2026, "As long as hyperscalers continue their capital expenditure and investment cycles, the boom in the Korean stock market will persist." DWS Asset Management, established in 2002, is a foreign asset management company that manages over 10 trillion won in assets under management (AUM) in Korea and is actively engaged in the Asia-Pacific region.

Muller confirmed, "We are seeing that the Korean stock market is delivering outstanding performance," and explained, "If such high performance continues, the economy should be slowing down, but it seems to be defying this cycle at present." He added, "Even when looking at traditional indicators such as the 12-month forward earnings per share (EPS), the KOSPI is not expensive at a level of around 8. In conclusion, while there may be volatility in the stock market, the current trend is likely to continue."

DWS Asset Management also evaluated that, thanks to government-led stock market structural reforms such as amendments to the Commercial Act, foreign investors now have better access to domestic investments. Tae Young Lee, Head of DWS Korea, said, "Currently, there are side effects such as increased volatility due to leveraged exchange-traded funds (ETFs), but considering the fundamentals of Samsung Electronics and SK hynix, I believe such volatility is temporary." He added, "The reform direction of the National Pension Fund and retirement pensions, as well as government policies, are helping to scale up the domestic capital market."

Clemens Schaefer, Global Head of Real Estate for DWS Asia-Pacific and EMEA, is speaking at a press conference held in Yeouido, Seoul on the afternoon of the 29th. Photo by Seungwook Park

Regarding the Korean real estate market, DWS expects returns in the logistics sector to rise. Clemens Schaefer, Global Head of Real Estate for Asia-Pacific, Europe, Middle East, and Africa at DWS, emphasized, "DWS has also invested in Korean offices and logistics, and we expect significant results in logistics. Since the market does not provide rent levels high enough to promote new logistics-related property developments, rents in the logistics sector will eventually rise, leading to higher returns."

Schaefer also stated, "We are working to enable a German pension fund to acquire an office in Gangnam, Seoul. Gangnam’s office supply and demand situation is better than that of traditional Central Business Districts (CBD), and we have found that new developments are less active compared to the traditional CBD."

On the same day, Schaefer presented the current outlook for the European real estate market. He said, "The expected returns for the real estate market over the next five years are 9% in Europe, higher than 7.2% in the United States and 7.0% in the Asia-Pacific region. Since the end of 2020, construction starts in Europe have dropped by 40%, and with low vacancy rates, rents are rising."

Not only are returns high, but investors can also benefit from currency hedging effects. Schaefer noted, "There is a particularly strong demand for European real estate from U.S. pension funds. In addition to attractive risk-adjusted returns, U.S. investors can earn an additional annual return of 100–120 basis points (1bp=0.01 percentage points) when investing in Europe, due to higher U.S. interest rates."

This content was produced with the assistance of AI translation services.