Two years on, Korea's REITs activation plan lags on key tasks, lawmaker says
In short
Two years after the Ministry of Land, Infrastructure and Transport announced a plan to activate the REITs market, data submitted to opposition lawmaker Heo Young shows several key measures have not been carried out. No support has been provided to REIT operators for prime office and commercial land in the 2nd and 3rd new towns, no REIT loan investments have been made, and dividend and board guidelines have not been implemented. Heo said the National Assembly audit will examine possible regulatory blind spots between the ministry and the Financial Services Commission.
Why it matters
The plan was the government's stated route to expanding the domestic REITs market, and the data presented by a sitting lawmaker is now feeding into the National Assembly's audit of the land ministry. How the ministry answers on the unimplemented tasks will shape whether the dividend, land-supply and lending measures are revived or set aside.
Key facts
- The Ministry of Land, Infrastructure and Transport announced a REITs activation plan in June 2024. [ 1 , 2 ]
- Data submitted by the ministry to Democratic Party lawmaker Heo Young shows the measure to give REIT operators priority access to prime office and commercial land in the 2nd and 3rd new towns and to support equity investment has produced no support to date. [ 1 , 2 ]
- Supervisory rules on REIT loan screening, limits, collateral and recovery procedures were prepared, but no REIT loan investment has been recorded. [ 1 , 2 ]
- Allowing REITs to retain part of dividends as new investment funds and permitting monthly dividends have not been implemented. [ 1 , 2 ]
- Guidelines on board composition and operation, which the ministry said it would pursue by the end of 2024, have not been completed. [ 1 , 2 ]
- The plan to scrap limits on mortgage bonds and commercial mortgage-backed securities (C-MBS) fell through when the related enforcement decree revision was not carried out. [ 1 , 2 ]
- Yonhap reported that five REITs have appeared in new sectors after investment targets were expanded — one in healthcare and four in data centers. [ 1 ]
- Heo said he will examine at this year's National Assembly audit whether there are regulatory blind spots between the land ministry and the Financial Services Commission. [ 1 , 2 ]
Confirmed by several sources
- The REITs activation plan was announced in June 2024. [ 1 , 2 ]
- Support for providing prime office and commercial land in the 2nd and 3rd new towns to REIT operators, including equity investment, has produced no results. [ 1 , 2 ]
- Supervisory rules for REIT loan investment exist, but no loan investment has been made. [ 1 , 2 ]
- Internal retention of dividends and monthly dividends have not been implemented. [ 1 , 2 ]
- Board composition and operation guidelines promised for the end of 2024 have not been completed. [ 1 , 2 ]
- The scrapping of mortgage bond and C-MBS limits fell through at the enforcement decree revision stage. [ 1 , 2 ]
- Rep. Heo Young of the Democratic Party said the National Assembly audit will closely examine possible institutional blind spots between the land ministry and the Financial Services Commission. [ 1 , 2 ]
Still unclear
- Whether the five REITs in healthcare and data centers are considered a substantial result of the plan Only Yonhap reported the number and sectors of the new REITs; neither outlet assessed their size or performance.
- Whether the failed revision of the enforcement decree on mortgage bonds and C-MBS limits will be retried The documents say the revision was pursued and fell through, but give no next step.
- Why the remaining measures have not been implemented and when they might be Neither outlet gives a reason or a new timetable from the ministry.