History was made this week on Singapore’s Sentosa island where the US president, Donald Trump, met North Korea’s leader, Kim Jong Un, for the first time. The world at large will debate the meeting’s ramifications for the reclusive country’s denuclearization. But while that was the primary purpose of the meeting, Trump’s subsequent remarks also included visions of the country’s economic future, including its real estate opportunities.

Naturally, for a former real estate tycoon, he spoke enthusiastically about potential property windfalls in North Korea – specifically about the condos and hotels that could be developed – if its economy can open up.

And naturally, the possibility of being first-movers in a market like Pyongyang is already piquing the interest of high-net-worth investors and conglomerates. The South Korean retail group Lotte has already set up a team to study the North Korean market, according to the local press. Lotte already operates retail and residential projects in neighboring Russian and Chinese cities.

For the world’s institutional investors, speculation about a more open North Korea would be farfetched. But profiting from a North Korea-minus economic sanctions is not entirely absurd. Opportunistic still, but investors should take note of the development of neighboring markets in north-east China following this most unlikely of geopolitical breakthroughs.

Property prices already have surged in recent months in Dandong, a hub for trade between China and North Korea. A local property registration office had to put up a notice on its door since the number of applications to register property transactions – in the days leading up to a Korean summit on April 27 – exceeded its daily capacity of 260 cases, according to a Yahoo News report. Data on new home prices published by the National Bureau of Statistics revealed prices rose 2 percent in Dandong in April, making it one of the top performing Chinese cities that month.

Meanwhile, the city of Shenyang has become a key attraction for foreign and domestic companies that want to set up regional headquarters in north-east China. The vacancy rate for Shenyang office space dropped 5 percent year-on-year in the second half of 2017, according to property consultancy Colliers.

At PERE’s annual China roundtable earlier this month, participants spoke about how global investors are again comfortable investing in China via pan-Asia and China-focused funds, compared with 12 months ago when currency volatility and macroeconomic risks were major dissuading factors. For example, over a quarter of LaSalle Investment Management’s latest pan-Asia fund – LaSalle Asia Opportunity Fund V– which closed on $1.15 billion in April – is set to be invested in China, more than its predecessor fund.

According to industry body ANREV’s Investment Intentions Survey for this year, Tier 1 cities in China are the third most preferred investment location for investors in Asia-Pacific. But for those investors willing to take the risk of venturing into second and third-tier markets, small cities like Dandong and Hunchun that lie on the border with North Korea could be a potential super-opportunistic bet. This is already true for some mainland Chinese investors, which would welcome more deployment opportunities domestically, as their capital continues to be trapped onshore amid capital control measures.

And as far as global investors are concerned, taking a risk in the more familiar Chinese market – notwithstanding its own various trade issues – would be the more viable first step toward engaging the unchartered lands and beaches of more globally connected Northern Korea.

Email the author Arshiya Khullar at akhullar@peimedia.com