Koramco REITs Management and Trust is developing an office complex with a scale of 1 trillion won in the public land of Gwacheon Juam district.
Koramco noted on the 17th that it has signed a land sale agreement with the Korea Land and Housing Corporation (LH) and will begin the development of the office complex utilizing the land compensation method. The land compensation method allows landowners to invest the compensated land into a REITs in exchange for receiving dividends.
This is the first large office complex development in the country utilizing the land compensation method. Until now, this method has been limited to small-scale development projects such as commercial buildings or officetels.
The Gwacheon Juam district is a site of 929,080 square meters (about 280,000 pyeong) in Gwacheon city, encompassing Gwacheon-dong and Juam-dong. Koramco will develop a business complex combining three buildings with 6 underground floors and 10 above-ground floors, covering an area of 153,057 square meters (about 46,300 pyeong) on a site of 17,454 square meters (about 5,280 pyeong).
To this end, Koramco established the "Gwacheon Juam Land Compensation Development No. 1 Trust Management Real Estate Investment Company (Gwacheon Juam Land REITs)" in September 2022 and began the project. Koramco plans to start construction in the second half of 2027 and aims to complete the development by the first half of 2030.
Initially, the Gwacheon Juam Land REITs planned to develop over 500 public-supported private rental dwellings on the nearby site (B-1 block). However, as demand for real estate along the border of Yangjae and Gwacheon increased, it expanded the purchase target area and shifted the development focus from dwellings to offices. A Koramco official said, "This change was a proactive response to environmental changes in real estate, including the establishment of the Yangjae R&D special zone near the Gwacheon Juam area."
The project site is a key area connecting the Gangnam business district with Bundang and Pangyo business districts. Recent large-scale development projects, such as the redevelopment of The-K Hotel, KCTC IDC and R&D development, and Harim's urban advanced logistics complex, have increased the potential of the area as a business district.
Kim Cheol-kyu, head of the REITs investment department at Koramco REITs Management and Trust, said, "There is significance in evolving the previously small-scale division-style land compensation REITs into a large-scale long-term operation model to present new possibilities," and added, "In the future, we are considering not only large offices but also senior housing and data centers (IDCs)."