AMC Public Sale REIT Business Added, Ministry of Land Approval Completed
[Asia Economy Reporter Park Hyesook] Incheon Urban Corporation (iH) has opened the way to entrust asset management services of real estate investment trusts (REITs) conducting public sale projects.
In May last year, iH became the first local public enterprise to be licensed by the Ministry of Land, Infrastructure and Transport as an Asset Management Company (AMC), but its scope of work was limited to housing rental projects, land compensation REIT projects, and urban regeneration projects.
Recently, iH received approval from the Ministry of Land to expand the AMC scope, allowing it to also perform AMC duties for public sale project REITs aimed at expanding public housing supply in the region.
As the implementer of various government policy projects to expand housing supply in the metropolitan area, including the 'Public Housing 3080+ Supply Plan' announced last year, iH plans to directly carry out asset management services while promoting urban public housing complex projects under the 'Special Act on Public Housing' through the REIT method.
Among the public housing supply measures, the urban public housing complex project is a project where the public sector secures sites through district designation in areas difficult to develop by private projects, such as station areas, semi-industrial zones, and low-rise residential areas, and simultaneously promotes the creation of urban function hubs along with quality housing.
In Incheon, three sites were included in the urban public housing complex project areas of the government's 'Public Housing 3080+ Supply Plan' announced last year: Michuhol-gu Dohwa-dong Jemulpo Station area (98,961㎡, expected supply of 3,104 housing units), Bupyeong-gu Sipjeong-dong Dongam Station area (51,622㎡, 1,731 units), and Bupyeong-gu Bupyeong-dong Gulpocheon Station area (78,075㎡, 2,531 units).
iH expects that by promoting the urban public housing complex project through the REIT method, it can share development profits, minimize the corporation's financial burden, and more swiftly advance government policy projects.
A REIT is a nominal company that collects funds from multiple investors to invest in real estate and distribute profits. Except for self-managed REITs, entrusted management and corporate restructuring REITs do not have full-time executives including asset management professionals, so they entrust asset management to an AMC.
An AMC is entrusted with the asset management of REITs, handling tasks such as selecting investment targets, establishing and obtaining business licenses for REITs, fundraising, purchasing, managing, disposing, and liquidating real estate.
Lee Seung-woo, president of iH, said, "With the AMC scope expansion approval, we can accelerate the government's housing supply expansion projects," adding, "We will contribute to citizens' housing stability by utilizing the corporation's accumulated experience and real estate finance techniques to supply public sale and public rental housing."
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