Ministry of Land, Infrastructure and Transport Announces Recruitment of Private Operators for the First Public-Private Partnership Urban Regeneration REIT

Public Announcement on Website from the 20th... Presenting a New Paradigm for Urban Regeneration through Public-Private Collaboration

Cheonan Oryong Stadium demolition site.

[Asia Economy Reporter Kangwook Cho] The Ministry of Land, Infrastructure and Transport announced on the 19th that, as the first step toward launching the first public-private partnership urban regeneration REIT, it will recruit private operators to lead the REIT (Real Estate Investment Trust) from the 20th until July 9.

A REIT is a real estate indirect investment vehicle that collects funds from multiple investors in the form of a joint-stock company, invests them, and returns profits.

The public-private partnership urban regeneration REIT differs from previous urban regeneration REITs, which were planned mainly by the public sector with the private sector only participating in simple construction roles. Instead, the private sector, local governments, and the Housing and Urban Fund (Urban Account) collaborate from the planning stage to develop the project. The private sector participates from project planning on the condition of investing at least 2% of the total project cost, overseeing the entire project including REIT structuring, design, construction, and facility operation (handled by AMC). Local governments provide candidate sites such as shared land in declining areas (in-kind contribution), support permits and approvals, and present minimum requirements. The fund supports the overall project process including site solicitation and private operator selection, provides funding and loans, and verifies the public nature of the urban regeneration project.

The project site open for application this time is the area around the demolished site of Oryong Stadium in Cheonan City (36,394㎡). Private operators must create sports facilities such as swimming pools, ice rinks, and saunas, as well as some public facilities, as required by Cheonan City's solicitation conditions. Other than these, applicants can creatively and freely plan residential, commercial, and other facilities and submit their proposals.

The preferred negotiation candidate will be selected through a two-stage evaluation of the project application: first stage (document review, 400 points) and second stage (interview with judges, 600 points) conducted in July and August. The selected preferred negotiation candidate will complete detailed project plan consultations with local governments within the year and officially start the project through REIT establishment. The first stage evaluation criteria include project capability, financial conditions, and equity investment ratio; the second stage criteria include appropriateness and public nature of the development plan, and risk management.

Moon Sung-yo, head of the Urban Regeneration Project Planning Division at the Ministry of Land, Infrastructure and Transport, said, "The public-private partnership urban regeneration REIT is a project presenting a new paradigm of urban regeneration created together by the private and public sectors," adding, "We hope this project will serve as a starting point for the private sector's creativity to play an active role in revitalizing declining old downtown areas."

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