Koramco, Korea's First Large-Scale REIT for Public Housing Supply

563 Apartments Supplied in Gwacheon Juam District Opposite Umyeon-dong, Seoul
CEO Jeong Junho: "Public Contribution Through Investment... The Essence of ESG Investment"

Koramco Asset Trust announced on the 15th that it will supply public-supported private rental housing in the Gwacheon Juam District, facing Seocho-dong, Seoul, through a Daeto REIT. This is the first case in Korea where public rental housing is developed through a Daeto REIT.

Koramco established the ‘Gwacheon Juam Daeto Development No.1 Entrusted Management Real Estate Investment Company (hereinafter ‘Gwacheon Juam Daeto REIT’),’ with all 167 Daeto compensation right holders as investors, and received project approval from the Ministry of Land, Infrastructure and Transport through a special registration for this public rental housing supply.

The Gwacheon Juam District is a site of 929,080㎡ (approximately 280,000 pyeong) in the areas of Gwacheon-dong and Juam-dong, Gwacheon City, developed across Yangjae-daero from Umyeon-dong, Seocho-gu, Seoul. Koramco plans to supply six apartment buildings ranging from two basement floors to 30 floors above ground, totaling 563 households, and neighborhood living facilities on the B-1 block designated for public-supported private rental housing. Construction is scheduled to begin in the second half of 2024, aiming for completion in 2027.

Public-supported private rental housing is a corporate-type rental housing business that started under the Park Geun-hye administration as ‘New Stay,’ prioritizing supply to housing-vulnerable groups such as household members aged 19 or older without homes, newlyweds, and the elderly. Koramco already operates public-supported private rental housing projects in places like Dongtan and Sejong City, but this is the first time applying a Daeto REIT to public-supported private rental housing. The REIT industry expects Koramco’s project to serve as a catalyst for revitalizing public development through Daeto REITs.

A Daeto REIT is a type of REIT established by landowners who have had their land acquired for public interest projects such as new town supply plans by the government, contributing their Daeto compensation rights received as land compensation. The REIT management company develops business models on the contributed land, promotes the projects, and distributes profits to the investors.

Gwacheon Juam Daeto REIT is Koramco’s second Daeto REIT project, following the development of commercial facilities in Pyeongtaek Brain City in 2021 using the Daeto REIT method. At that time, while the Daeto REIT market was limited to around 30 to 40 billion KRW, Koramco pushed forward a large-scale development project exceeding 100 billion KRW, setting a milestone for expanding the Daeto REIT market.

Jung Jun-ho, CEO of Koramco Asset Trust, said, “Gwacheon Juam Daeto REIT not only supports stable income for landowners by assetizing land acquired for public use but also helps housing-vulnerable groups by supplying public-supported private housing, making it a virtuous investment model. Through Koramco’s unique ESG investment that induces positive interactions between investors and local communities, we will continue to present various solutions that contribute to our society.”