SOUTH KOREA Trends and Developments Contributed by: Junghwan Lee, Dong Seok Woo, Jun Woo Cho and Jee In Kim, Lee & Ko
Improvements to operational efficiency of REITs • Longer Period Before the Public Offering Require - ment for Regular REITs: The deadline for a regu - lar REIT to complete a public offering has been extended from two years to three years after authorisation, and the 50% cap on individual own - ership now applies only from the time of the offer - ing. This gives regular REITs additional flexibility to stabilise the underlying asset and to choose a more commercially appropriate timing for a public offer - ing, and is meaningful in that it allows for a modest extension of the period during which a REIT may operate on a private placement basis. • Reduced Administrative Burden for Institutionally Backed and Listed REITs: Where pension funds, mutual aid associations or other institutional inves - tors, or listed REITs, hold at least 50% of the equity in a REIT, the public offering requirement no longer applies. Related reforms have also substantially reduced or dispensed with certain investment- reporting and disclosure requirements for these vehicles, thereby improving operational efficiency and lowering administrative friction. Commercial Real Estate Monetisation Trends Among Large Corporations Asset monetisation by large corporations amid portfolio rebalancing In 2025, total office investment volume in the Seoul and Bundang markets exceeded KRW24 trillion, and a meaningful portion of that deal flow was driven by asset disposals and monetisation by major South Korean conglomerates. Groups such as SK and LG are actively rebalancing their business portfolios to raise capital for future growth sectors and, in the process, are divesting an increasingly broad range of assets. What was once concentrated on landmark headquar - ters buildings in core locations is now extending to underutilised regional assets, manufacturing facilities and other infrastructure-linked properties. At the same time, sale-and-leaseback structures are becoming more prevalent, enabling corporate sellers to unlock substantial liquidity while maintaining operational con - tinuity through continued occupancy. Asset monetisation through sponsor REITs In addition to conventional sales, large corporations are increasingly using sponsor-backed REITs as a core
asset monetisation tool. More recently, this structur - ing approach has moved beyond conventional office assets and into advanced industrial and infrastruc - ture-linked properties. Hanwha Group, for instance, has reportedly been preparing both a green energy infrastructure REIT built around solar power plants and an advanced industry REIT focused on manufac - turing facilities and data centres. Expansion of share deals Investors and corporations pursuing high-quality assets are also increasingly turning to share-deal structures, whereby beneficiary interests or equi - ty interests in an existing fund or REIT vehicle are acquired without disturbing the existing vehicle struc - ture. Practical legal implications • Structure of Long-Term Master Leases: In sale- and-leaseback and sponsor REIT structures, leases with large corporate anchor tenants directly underpin the profitability of the investment vehicles. Lease documentation should therefore address inflation-linked rent adjustment mechanisms, restrictions on early termination, termination com - pensation and credit-support or security-enhance - ment measures in the event of deterioration in the tenant sponsor’s credit profile. • Regulatory Compliance for Specialised Assets: When monetising specialised assets such as industrial-complex factories or water treatment facilities, investors should carry out detailed legal diligence to confirm that the revised regulatory requirements are satisfied and that the relevant permits and approvals can be lawfully transferred, retained or succeeded to as needed. • Conflict-of-Interest: Sponsor REIT structures inher - ently involve potential conflicts of interest where the corporate parent is the seller and an affiliated REIT is the buyer. If assets are injected into a REIT at a value that diverges from market value, minority shareholders may be adversely affected. There - fore, it is important to substantiate the objectivity of the valuation process and to comply strictly with board-level and shareholder-level procedural requirements.
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