The corporations restructuring real estate investment company (CR REITs), which buys and operates unsold dwellings in Daegu, has completed its registration. This is the first CR REIT to be registered more than a year after the CR REIT system was revived in March last year. With the emergence of the first CR REIT that actively purchases unsold dwellings in the provinces, it seems that the ongoing issue of unsold dwellings will begin to be resolved.
According to the Ministry of Land, Infrastructure and Transport on the 22nd, the "JB and YSK No. 2 CR REIT" has been confirmed to have completed its registration with the ministry the previous day. This REIT will operate by acquiring approximately 300 unsold apartments in the Suseong District of Daegu. The project cost is 46.7 billion won. A Ministry official noted, "The (JB and YSK No. 2) CR REIT has been registered for the first time." JB Asset Management, which manages the REIT, also stated, "The registration was completed as of the 21st."
The CR REIT gathers funds from multiple investors to purchase unsold dwellings, operates them as rentals, and sells them for revenue when the real estate market recovers.
The JB and YSK No. 2 CR REIT is the first CR REIT to begin operations since the Ministry of Land, Infrastructure and Transport revived unsold REITs in the provinces. The ministry resurrected the CR REIT system, which had not been in place for 10 years, in response to the issue of unsold dwellings last March. Subsequently, applications for registration were made in September and October last year for CR REITs such as "KB Gwangyang Felicia CR REIT" and "JB No. 1 CR REIT," which contained unsold apartments in Gwangyang, Jeollanam-do. However, no CR REIT has completed registration and begun operation due to difficulties in sales negotiations between the REITs and construction companies of the apartments they intended to purchase.
As the CR REIT begins operations in earnest, the acquisition of unsold properties in the provinces through CR REITs is expected to become more active. From late April to early May, a CR REIT containing 2,000 unsold dwellings in Daegu, Gwangyang, and other areas is also expected to submit a registration application. A ministry official stated, "There will likely be additional CR REIT registration applications this week and next week."
The number of unsold properties, referred to as malignant unsold dwellings, was 23,722 units nationwide at the end of February. This is a 99.9% (11,855 units) increase compared to the same period last year (11,867 units). It is also the largest scale in 11 years and 5 months since September 2013 (24,667 units). 80.8% of the nationwide malignant unsold dwellings are located in the provinces (19,179 units), indicating that 8 out of 10 apartments that have been completed but not sold are concentrated in the provinces.