Koramco Selected as Anchor REIT Manager for 450 Billion KRW Housing and Urban Fund

Expecting REITs Activation through Liquidity Supply in Domestic REITs Market

[Asia Economy Reporter Minji Lee] Coramco Asset Trust announced on the 14th that it has been selected as the anchor REIT manager for a 450 billion KRW scale fund invested by the Housing and Urban Fund.

The anchor REIT is a blind fund structured as a parent-subsidiary REIT, composed of 300 billion KRW of surplus funds from the Housing and Urban Fund and joint investment funds from pension funds under 150 billion KRW. This fund is scheduled to be managed for seven years from its establishment date. Coramco Asset Trust plans to start operations after due diligence next week.

The investment targets are listed REITs or public real estate funds with domestic commercial real estate assets. More than 60% of the total investment amount will be invested in REITs, and the investment size per project is within 25% of the total committed amount.

The Housing and Urban Fund’s anchor REIT investment is interpreted as the government’s more proactive intention to expand the public real estate indirect investment market. It is also expected to contribute to revitalizing the domestic REIT market, which has been sluggish due to the recent impact of COVID-19, by supplying large-scale liquidity.

In September last year, the government announced a plan to expand the domestic REIT market size to about 60 trillion KRW by 2021, more than ten times compared to the end of 2018, through the ‘Public Real Estate Indirect Investment Activation Plan,’ and introduced support measures such as dividend income separate taxation benefits and lowering the tax rate to 9% per year.

The Ministry of Land, Infrastructure and Transport conducted a second qualitative evaluation through face-to-face presentations in late February for Coramco Asset Trust, Shinhan REIT Management, and Marsten Investment Management, which passed the first quantitative evaluation, and finally selected Coramco Asset Trust.

Coramco Asset Trust is evaluated as the only domestic company possessing all essential experiences for managing anchor REITs, including REIT listing experience, blind fund management experience in a REIT structure, and re-indirect investment experience in a REIT structure.

Cho Chang-woo, team leader at Coramco Asset Trust, said, “Since the purpose of this anchor REIT is to ‘revitalize the domestic public real estate indirect investment market,’ we will strive to discover excellent domestic REITs and establish them in the public market.” He added, “At the same time, as this involves managing public funds from the Housing and Urban Fund, we will operate with a deep sense of responsibility and focus on improving operational returns.”

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