It has been two years since the government announced measures to develop the REIT (Real Estate Investment Trust) market to the level of developed countries, but it has been revealed that not a single key initiative—such as the priority allocation of public housing land and loan-based investments—has been implemented.
On June 17, 2024, the Ministry of Land, Infrastructure, and Transport announced the “REIT Revitalization Plan” at a meeting of economic ministers and stated that it would implement a significant number of the initiatives within that year. At that time, the total assets of domestic REITs stood at approximately 98 trillion won—having doubled over the past five years—but the market capitalization of listed REITs was only 8 trillion won, accounting for just 0.3% of gross domestic product (GDP), a stark contrast to the United States (6%) and Singapore (20%). Furthermore, 76% of investments were concentrated in residential and office properties. The government announced measures in three key areas—investment diversification, expansion of investment capacity, and protection of investor rights—with the goal of bringing the sector up to the level of developed countries.
According to implementation review data received by Representative Heo Young of the National Assembly’s Land, Infrastructure, and Transport Committee from the Ministry of Land, Infrastructure, and Transport on October 5, some of these initiatives have yielded results. After broadening the range of investment targets, one healthcare REIT and four data center REITs received approval, and the amendment to the Enforcement Decree of the Corporate Tax Act (February 2025) to promote asset revaluation, as well as the allowance of on-exchange trading for anchor REITs, were implemented.
However, the plan to prioritize the supply of prime office and commercial land in the second- and third-phase new towns to REIT operators, with the Korea Land and Housing Corporation (LH) providing equity investment support, has shown absolutely no progress. Although supervisory regulations were established—covering loan screening, limits, collateral, and recovery procedures—to help REITs secure stability and profitability through loan investments, there were no actual loan investment transactions.
Efforts to reform fund management and dividend structures also stalled. Neither the proposal to amend the current regulation—which mandates the distribution of at least 90% of profits as dividends—to allow a portion of funds to be retained for new investments with shareholder consent, nor the plan to permit monthly dividends, has been implemented. The guidelines for the composition and operation of REIT boards of directors, which were supposed to be established by December 2024, have not yet been released.
Efforts to revise the enforcement decree to abolish the 30% investment limit on mortgage-backed securities and commercial mortgage-backed securities (C-MBS) were pursued but ultimately failed. The proposal to allow mergers between publicly offered REITs and REITs exempt from public offering was not introduced until December 24 of last year and remains pending in a National Assembly standing committee.
The promise to increase the scale of investment in anchor REITs by attracting public funds, such as from mutual aid associations, has also not been fulfilled. As of the end of last year, the total committed capital for anchor REITs stood at 465 billion won, unchanged since September 2023, with only two investors: the Housing and Urban Development Fund and Koramco Asset Trust.
Rep. Heo Young stated, “While the Ministry of Land, Infrastructure and Transport is actively utilizing REITs in various policies, institutional reforms to support the REIT market itself are not progressing as quickly as expected,” adding, “I will closely examine during this parliamentary audit whether there are any institutional blind spots between the Ministry of Land, Infrastructure and Transport and the Financial Services Commission.”
