Koramco to Manage PF Advancement Priming Development Anchor REITs

On December 4, Koramco Asset Trust announced that it has been selected as the final asset management company (AMC) for the 'Project Financing (PF) Advancement Priming Development Anchor REITs' promoted by Korea Land & Housing Corporation (LH).

This initiative was established to normalize development projects that, despite having strong business potential, face delays or risks of suspension because they cannot transition from the bridge loan stage to the main project financing. LH began soliciting bids for a delegated operator in July, selected a preferred negotiation partner last month, and recently finalized Koramco Asset Trust as the delegated operator.

The 'PF Advancement Priming Development Anchor REITs' is a policy-type REIT jointly funded by LH and private entities, with a total size of 640 billion won. The structure involves preemptively supplying funds to selected high-potential projects at the bridge loan stage and recovering the investment once the main project financing is executed.

The government and LH expect this initiative to stabilize the market by resolving difficulties in initial capital procurement, normalizing development projects, and revitalizing the construction sector. In addition, they plan to maximize policy effectiveness by prioritizing national strategic sectors such as AI data centers and rental housing, as well as regional hub development projects.

Koramco Asset Trust reportedly received high marks in this evaluation for its ability to attract private investors, identify investment targets, and design and manage REIT structures and strategies. The stability of its institutional investor-based fund management and the reliability of its performance, even amid market fluctuations, were also important factors in the selection process.

Recently, the PF market has faced a complex mix of pressures, including high interest rates, weakened demand, and the maturity of bridge loans, leading to a deepening liquidity crunch at the early stage. If risks at the bridge loan stage increase, it directly results in project delays and higher financial and fixed costs, thereby heightening business uncertainty. In this context, development anchor REITs that proactively mitigate early development risks are seen as a "safety net" to prevent a chain of defaults in the development market.

To operate the anchor REITs, Koramco Asset Trust has established a collaborative system between its development and investment funding teams, generating synergy in selecting quality candidate sites and reviewing business feasibility in line with LH's investment criteria. Leveraging its sector-specialized system, a core strength of Koramco, the company applies expertise from both development and funding fields to the management of the anchor REITs.

Koramco Asset Trust has maintained the top market share in the private REITs sector for 24 consecutive years and continues to deliver stable management performance across REITs, trusts, and funds, backed by an A (Stable) credit rating and approximately 520 billion won in equity capital. The company also manages around 5.2 trillion won in blind fund assets entrusted by major institutional investors such as the National Pension Service, Government Employees Pension Service, and Military Mutual Aid Association, investing in a variety of strategic assets. Notably, this year, the company has advanced its internal controls by newly establishing a "duty structure diagram" in collaboration with law firm Jipyong, clearly defining the compliance and responsibility scope for executives and officers.

Kim Cheolgyu, Head of REITs Investment Division at Koramco Asset Trust, stated, "The operation of this PF Advancement Priming Development Anchor REITs will serve as a vanguard in supporting the normalization of the construction and development markets by mitigating early-stage risks in the PF market." He added, "We will do our utmost to achieve both policy objectives and stable returns for investors, based on sector expertise and thorough risk management principles."

원본보기 아이콘

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.