The Ministry of Land, Infrastructure and Transport said on the 29th that it held a meeting to review the REITs market with the Financial Services Commission, Korea Real Estate Board (REB), and Financial Supervisory Service, and discussed the status and response direction related to JR Global REIT's corporate rehabilitation.
At 4 p.m. on the day, the Ministry of Land, Infrastructure and Transport held a joint review meeting of related agencies presided over by First Vice Minister Kim Ei-tak to examine the overall situation of the REITs market. The meeting was arranged to discuss market impact and response measures, focusing on the case of JR Global REIT, which recently filed for corporate rehabilitation.
There are 25 REITs listed on the stock market, with a market capitalization of about 9.7 trillion won and asset size of about 19.4 trillion won. Of these, eight REITs hold overseas assets, accounting for a market capitalization of about 1.3 trillion won and asset size of about 3.6 trillion won.
JR Global REIT filed for corporate rehabilitation on the 27th and is a REIT that invests its entire assets in overseas real estate. It was found that a combination of falling asset values due to the deterioration of the overseas commercial real estate market, concentration in certain assets, and the burden of corporate bond repayment led to the insolvency. However, the market capitalization of the REIT is less than 3% of the total listed REITs market, and its direct impact on the overall market was assessed to be limited.
To enhance confidence in the REITs market, the government plans to continuously monitor market conditions and review institutional improvements to protect investors and minimize risks. In particular, it will closely check the progress of JR Global REIT's corporate rehabilitation process and respond to investor inconveniences.
It is also conducting a joint inspection with related agencies since the 28th to verify the allegations and facts raised regarding the circumstances of the insolvency, and plans to respond strictly if any illegality is identified.
Market stabilization measures will proceed in parallel. The government will continue to supply liquidity to the listed REITs market by using anchor REITs, and has completed advance preparations to immediately expand the size of bond and money market stabilization programs if market volatility increases.
An official at the Ministry of Land, Infrastructure and Transport said, "We will continue to pursue preemptive responses and stabilization measures to prevent the spread of anxiety across the REITs market."