The city of Seoul is considering a plan to develop part of the Yongsan International Business District (conceptual design) through a real estate investment company (REITs) model, granting citizens priority subscription rights.
On the 13th, the city of Seoul announced that the Ministry of Land, Infrastructure and Transport recently proposed the idea of introducing a 'local coexistence REIT' into the Yongsan International Business District development project. The Yongsan International Business District will be developed on the site of approximately 494,601 square meters of the Yongsan Repair Center, with a total project cost of about 51 trillion won.
The city of Seoul plans to proceed with the development by dividing the site into four blocks and 20 parcels. There are plans to build a landmark building reaching up to 1,700% of height, with 100 floors. Most of the 20 parcels are likely to be sold. However, the city of Seoul and the Seoul Housing and Communities Corporation (SH Corporation) are considering developing one or two parcels directly. In this case, project REITs and local coexistence REITs can be utilized. A city official noted, 'After the Ministry of Land, Infrastructure and Transport's REIT operation guidelines are released, we will be able to confirm whether project REITs can actually be applied to the Yongsan International Business District development,' adding, 'We are still in the initial review stage.'
REITs gather funds from multiple investors to invest in real estate, distributing operating income or gains from asset sales as dividends. Among them, project REITs are a system that allows REITs to manage everything from real estate development to operation, while local coexistence REITs prioritize granting subscription eligibility to local residents. On the 1st, an amendment to the Real Estate Investment Company Act passed the National Assembly's plenary session, providing a legal basis for both systems.