Incheon Urban Corporation Approved for Dual Operation as Asset Management Company... First Among Local Public Corporations

Strengthening Public REITs Projects Including Housing Lease, Land Compensation, and Urban Regeneration

[Asia Economy Reporter Park Hyesook] Incheon Urban Corporation (iH Corporation) has received approval from the Ministry of Land, Infrastructure and Transport to concurrently operate as an Asset Management Company (AMC) under the Real Estate Investment Company Act. This is the first case for a local public corporation.

After receiving preliminary approval for AMC in February, iH Corporation secured its organization, personnel, office space, and implemented plans for establishing an IT system. Following an on-site inspection by the Ministry of Land, Infrastructure and Transport, final approval for concurrent AMC operation was granted on the 7th.

An Asset Management Company is a firm entrusted with managing the assets of Real Estate Investment Trusts (REITs), handling a series of processes from selecting investment targets, establishing and licensing REITs, raising funds, to purchasing, managing, disposing of, and liquidating real estate.

Until now, government debt management of local public enterprises limited the promotion of new revenue or policy projects. However, with this AMC concurrent operation approval, the corporation can minimize its own financial burden while establishing a foundation to promote public REIT projects utilizing funds such as those from the Housing and Urban Guarantee Corporation (HUG).

Accordingly, iH Corporation plans to revitalize public policy projects such as public rental housing and urban regeneration projects, which are difficult to promote in the private sector due to lack of profitability, and to pursue public REIT projects aimed at fiscal soundness, including land compensation to minimize project costs. Through this, it is expected to realize citizens' residential welfare and contribute to balanced urban development, including revitalization of old downtown areas.

This year, iH Corporation will start four REIT projects including Dohwa private and public rental housing and purchased rental housing. Next year, it plans to promote eight projects including Geomdan and Geomam private rental housing and Geomam land compensation, and in 2023, nine REIT projects including Guwol A3 Happy Permanent Housing.

Lee Seung-woo, President of iH Corporation, stated, "When promoting public REIT projects, we will attract private capital through investment and loan support from the Housing and Urban Fund and guarantees from HUG, minimizing the corporation’s financial burden and enhancing financial soundness." He added, "We expect to actively realize the government’s residential welfare roadmap policy through the AMC concurrent operation approval."

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