This article was published on the ChosunBiz MoneyMove (MM) site at 9:45 a.m. on Dec. 24, 2025.
Although the KOSPI index has topped the 4,100 level and continued a run of record highs, listed REITs (real estate investment trusts) have not emerged from their slump. Despite recent hopes for rate cuts, most issues are trading well below their offering prices, and some investors are even calling, "Sell the buildings and liquidate the companies to return our investments."
On the 24th, the Korea Exchange (KRX) and the REIT industry reported that among 25 domestically listed REITs, 22, or 88%, were trading below their offering prices. REITs backed by overseas real estate in particular showed dismal results. The previous day's closing price of Mastern Premier Reit 1 was 1,639 won, a 67.72% plunge from the offering price (5,000 won). Shinhan Global Active REIT (-57.07%), Mirae Asset Global REIT (-48.70%), Mirae Asset Maps REIT 1 (-47.70%), and JR Global REIT (-42.30%) are also trading at roughly half their offering prices.
Exchange-traded funds (ETFs) that provide indirect exposure by bundling REITs are no different. PLUS K-REITs, which focuses on domestic REITs, fell 30.28% from its first-day closing price (10,005 won). TIGER REITs real estate & infrastructure and KODEX Korea real estate REITs & infrastructure, both regarded as relatively defensive because they include high-quality infrastructure assets, are recording negative returns of 13.66% and 6.33%, respectively.
This "REITs tragedy" stems from the combined effects of high interest rates since 2022 and a downturn in the real estate market. REITs borrow funds to invest in real estate and distribute rental income as dividends, but rising rates sharply increased interest expenses and eroded profitability. In addition, the U.S. Federal Reserve has taken a cautious stance on rate cuts, and REIT dividends being excluded from separate taxation has dampened expectations for share price gains.
As share prices stagnated, market attention has shifted from "management" to "liquidation." A recent case illustrates this. Koramco The One REIT, which posted an overwhelming return of 72.80% among domestic REITs this year, is an example. The REIT's stock surged as the possibility of selling its sole underlying asset, the Hana Securities Building in Yeouido, came to the fore. From shareholders' perspective, it became clear that selling the asset at its true value to secure liquidation proceeds above the offering price is far more profitable than receiving self-harming dividends. Currently only three REITs trade above their offering prices, including Koramco The One REIT, SK REIT (14.00%) and Shinhan Alpha REIT (9.40%).
Experts point to a loss of market confidence as the main cause. They say a vicious cycle has repeated, with REITs increasingly turning to shareholders for operating funds or debt repayment, removing momentum for share price gains. In a report on the status and improvement tasks of listed REITs, Kim Pil-gyu, senior researcher at the Korea Capital Market Institute, said, "The cause of the share price's adverse effect was that capital increase measures such as paid-in capital increases created a supply-demand imbalance in a situation with insufficient investment foundations," and added, "Restoring market confidence is necessary for REIT share prices to normalize."