The government has formally launched the "PF (project financing) development anchor REITs" initiative, which uses public funds as seed money to draw in private capital.
The Ministry of Land, Infrastructure and Transport said it will publicly solicit candidate projects for investment under the PF seed development anchor REITs, which have been formed at a total scale of 1 trillion won, starting on the 18th.
The system was prepared to help high-quality business sites that struggle to secure funds at the early stage of projects due to the recent tightening in the real estate project financing market. It is designed to have the public sector invest first and serve as a safety net, thereby encouraging private capital to enter with confidence.
The funds total 1 trillion won, comprising 200 billion won in public resources, about 320 billion won in private investment, and borrowing fund from corporate bonds issued with guarantees from the Korea Housing & Urban Guarantee Corporation (HUG).
After designating Koramco REITs Management and Trust and Korea Real Estate Investment & Trust Co. (KOREIT) as asset management companies (AMC) in Nov. 2025, authorities completed all preliminary procedures, including establishing the REITs and creating guarantee products, and embarked in earnest on sourcing investments. The REITs will be operated as two entities: Koramco Development Anchor REITs and K-One Development Anchor REITs.
The newly launched development anchor REITs will operate for the next five years. They plan to focus investment for one year and six months on projects at the "bridge loan" stage, which covers initial funds needed to purchase land, then reinvest the recovered funds in other projects.
The amount that can be invested per individual business site is within 50% of the land price, with a cap of up to 100 billion won. The offered investment rate will be determined through consultation between the developer and the asset management company, taking into account project risk and market conditions, and has been set at the level of the most stable AAA-rated 3-year bonds and debentures yield plus 250–300 bp (1 bp = 0.01 percentage point). This is significantly cheaper than funding obtained in the market.
Business sites submitted through the public call will be evaluated based on investment guidelines that assess project stability and public interest. They will then be finalized as support recipients through detailed review by an investment deliberation committee joined by the Korea Land & Housing Corporation (LH) and resolutions at REITs shareholder meetings.
Eligible business sites must, in principle, have 100% land secured and meet capital stability criteria such as an equity ratio over 20% relative to the land price. In addition, projects led by the government or local governments, those with significant social impact such as artificial intelligence (AI) data centers, or business sites that have adopted the PF advancement plan to directly operate after development will receive extra points in the review.
Kim Young-guk, head of the Dwellings and Land Office at the Ministry of Land, Infrastructure and Transport (MOLIT), said, "The launch of the development anchor REITs will serve as an opportunity to inject new vitality into strong development projects struggling with fundraising, particularly dwelling supply projects in the capital region and regional priority projects."