Korean REITs’ AUM rises 26% to W65tr

The combined assets under management by South Korea’s real estate investment trusts came to 65.3 trillion won ($58 billion) as of end-January, preliminary data showed Sunday.

The total volume rose 26 percent from the previous year, indicating a moderately growing market, according to the Korea Association of Real Estate Investment Trusts.

A REIT refers to a company designed to offer annual dividend returns to its investors in return for investment in securitized real estate.

By asset type, the AUM of REITs with entrusted management agreement came to 60.9 trillion won, followed by 3.9 trillion won for corporate restructuring REITs and 533.7 billion won for self-administered REITs.

As for portfolio construction, 56 percent of the assets were allocated to housing properties, with 9 out of 10 dedicated to residential rental real estate. Next were office (23.4 percent), retail (12.3 percent) and logistics (4.4 percent) properties.

The data also showed that the state-run Korea Land and Housing Corp. was managing 19.5 trillion won worth of real estate assets via REITs, the largest of the 40 companies authorized to manage the structured instrument. This was trailed by other major REIT asset management companies including Koramco, Daehan Real Estate Trust, KB Real Estate Trust and JR Asset Management.

Meanwhile, the listed REITs in Korea were managing a total of 7.9 trillion won worth of real estate assets, or 12 percent of the total domestic REIT AUM, since first introduced in 2001.

The 13 listed REITs’ combined market capitalization stood at 4 trillion won as of end-January. This showed a contrast with other countries, which adopted a legal basis for listed REITs in the early 2000s. The market cap of Japanese listed REITs topped 150 trillion won, while that of Singaporean ones amounted to nearly 90 trillion won.

The estimate showed that four more REITs in Korea -- respectively managed by D&D Investment, Shinhan REITs Management, Mastern Investment Management and NH NongHyup REITs Management -- are waiting to be listed on the nation’s stock market Kospi.

By Son Ji-hyoung (consnow@heraldcorp.com)