Gucci’s parent company, Kering Group, purchases a ‘1.3 trillion won building’ in New York
Building demand ↓ due to high interest rates… Large corporations with financial power see ‘investment opportunities’
Kering Group, owner of Gucci, purchased a building worth 1 trillion won in New York, USA. The interpretation is that large corporations are using the recent decline in real estate demand due to high interest rates as a reasonable investment opportunity.
Foreign media, including the New York Post, reported on the 23rd (local time) that the Kering Group purchased a building on Fifth Avenue in Manhattan for $963 million (about 1.2845 trillion won). The building area is 10,700㎥ (approximately 3,200 pyeong) and is located in a luxury apartment complex across from Trump Tower. It is known that the building houses a variety of luxury stores.
Kering Group is a large French group that owns Gucci, Bottega Veneta, Yves Saint Laurent, and Balenciaga. The Kering Group announced in a statement the day before, “Kering has secured a location on one of the world’s most iconic streets,” and added, “This decision is a selective real estate strategy to secure a highly desirable location.”
Foreign media outlets explained that recently, an increasing number of companies are choosing to purchase buildings instead of renting them. While demand for buildings has decreased due to rising interest rates and the spread of telecommuting, large companies with financial power are making ‘big moves’.
Kering Group has expanded its real estate presence in recent years by purchasing buildings in major cities around the world, including Paris, France and Tokyo, Japan. Italian luxury goods company Prada also completed the largest real estate transaction in Manhattan in 2023, acquiring two New York buildings for $835 million last year. In February of the same year, Hyundai Motor Company also purchased an 8-story building in Manhattan for $275 million.
The Financial Times (FT) reported on the 18th that Fontegadea, the asset management company of Zara founder Amancio Ortega’s family, invested 1.1 billion euros (approximately 1.6 trillion won) last year alone to purchase ten real estate properties. Pontegatea said, “When interest rates make it difficult to borrow, companies with low debt can purchase real estate at a reasonable price.”
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.