The Ministry of Land, Infrastructure and Transport (MOLIT) announced a package of measures to promote real estate investment trusts (REITs) in June 2024, but key tasks have not been carried out.
A plan to give REIT operators priority access to office and commercial land at prime sites in new towns designated under the second and third rounds of Korea's new town program, along with equity investment support, has produced no results to date, according to data the ministry submitted to Rep. Heo Young of the Democratic Party of Korea, a member of the National Assembly's Land, Infrastructure and Transport Committee, on the 5th. Lending investments by REITs have also yielded no results, although supervisory rules were put in place.
Measures allowing REITs to retain part of their dividends as funds for new investment, and to pay dividends on a monthly basis, have yet to be implemented. Guidelines on the composition and operation of boards of directors, which the ministry said it would push through by the end of 2024, have not been completed either. A plan to scrap limits on mortgage bonds and commercial mortgage-backed securities (C-MBS) collapsed after a revision to the presidential decree failed to pass.
"I will closely examine whether regulatory gaps remain between the land ministry and the Financial Services Commission during this parliamentary audit," Heo said.
