Last year, the outstanding loan balance for domestic construction and real estate corporations surpassed 361 trillion won, setting an all-time high. That is more than double the level a decade ago. It is analyzed as the result of a combination of a low interest rate stance, rising real estate asset values, and expanded corporate investment. However, as rapid expansion has led to structural burdens, the stance is shifting toward "selective expansion" alongside "parallel risk management."
Global full-service real estate firm CBRE Korea released a report on Dec. 11 titled "2025 Korea lender survey," saying, "As of last year, domestic commercial real estate loans totaled 361 trillion won, the largest on record." The survey covered 44 financial institutions, including domestic banks, insurers, securities firms, asset managers, and savings banks.
CBRE Korea said, "A prolonged low interest rate policy, expansion of the commercial real estate market, increased market participation by corporations, and rising asset prices worked in combination," and added, "However, structural burdens such as liquidity risk and asset concentration have accumulated, so sophisticated risk management will be needed across the market going forward."
Among respondents to this survey, 62% said, "Next year we plan to expand lending compared with this year." CBRE Korea interpreted this as a "selective expansion of project financing (PF) focused on high-quality assets." In particular, as expectations for a base rate cut are reflected, exposure to high-risk assets is decreasing and funds are concentrating on core assets with stable cash flows.
Lenders were somewhat cautious on interest rates. Eighty-four percent of respondents predicted, "In the first half of next year, the base rate will fall to the 2.00%–2.25% range." Although the Bank of Korea held rates steady through year-end, they expect effective cuts to filter through next year, gradually restoring market liquidity.
The asset classes where loans concentrate are also clear. Lenders said they prefer "stabilized offices" (75%) and "ambient-temperature logistics centers" (59%) the most. Both are evaluated as "core" assets based on low vacancy and stable tenant demand. By contrast, data centers and co-living are emerging as strategic assets and are classified as future-oriented sectors.
Loan underwriting standards have tightened further from last year. Loan-to-value (LTV) ratios for new loans were concentrated mainly in the 51%–70% range, and few institutions reported above 71%. Nonbanks also were found to rarely consider loans with LTVs of 70% or higher. Debt service coverage ratio (DSCR) levels of 1.3–1.4 times accounted for the highest share, indicating a stronger cash flow safety margin compared with the past (1.1–1.2 times).
Risks in the project financing (PF) market are also building. Delinquency rates for bridge loans and land-collateral loans have exceeded 17% and 30%, respectively, deepening distress. The delinquency rate for main PF also jumped from 0.96% in 2023 to 2.6% this year. Financial institutions are tightening conservative screening, such as requiring at least 30% equity for logistics and office development PF.
Choi Su-hye, executive director and head of research at CBRE Korea, said, "Next year marks the start of a strategic shift in the commercial real estate lending market," adding, "Expansion centered on high-quality assets appears likely to drive a recovery in liquidity." She continued, "As the flow of funds into future-oriented sectors such as data centers gains traction, the market will be reorganized around three pillars: risk control, profitability, and cash flow stability."