Gyeonggi Housing and Urban Corporation (GH) is entering the real estate indirect investment 'REITs (Real Estate Investment Trusts)' business, which invests in real estate and returns profits.
On the 19th, GH announced that it received approval from the Ministry of Land, Infrastructure and Transport for dual licensing as a 'REITs Asset Management Company (AMC)' under the Real Estate Investment Company Act. This full approval was obtained five months after the preliminary approval in April.
By operating a REITs AMC, GH can reduce its debt ratio by raising funds from private investors instead of directly injecting equity capital into various land development projects.
REITs are real estate indirect investment entities that collect funds from multiple investors to invest in real estate and real estate-related securities, and return profits to investors. An AMC is a company entrusted by REITs to handle the establishment, fundraising, purchase, management, and disposal of real estate in an integrated manner.
With the dual license approval laying the foundation for full-scale REITs business, GH plans to actively utilize REITs for supplying rental housing and regional development in the future. The first project is the New:Home selective rental housing supplied in the 3rd Pangyo area of Seongnam Geumto District, Gyeonggi Province, where tenants can choose to purchase after renting for six years.
Kim Se-yong, President of GH, stated, "With the dual license for AMC, we will improve our financial structure by reducing the debt ratio and expand our business area as a specialized asset management institution to lay the foundation for revitalizing the supply of public rental housing in the 3rd new town."
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