▲ Financial Services Commission Vice Chairman Kwon Dae-young speaks during the 2nd meeting of the legal advisory panel for the reorganization of the personal credit information consent system, held at the Korea Federation of Banks in Jung-gu, Seoul, on August 25.
Financial Services Commission Vice Chairman Kwon Dae-young emphasized the need for capital supply from the financial sector on the 17th, stating, "The private financial sector should also view the normalization of troubled project sites as a new investment opportunity to generate profits."
Vice Chairman Kwon made the remarks during an on-site roundtable meeting held at a Korea Asset Management Corporation (KAMCO) Fund project financing (PF) project site in Dohwa-dong, Mapo-gu, Seoul.
Following Financial Services Commission Chairman Lee Eog-weon's visit to the Pungmu Station Area PF project site in Gimpo, Gyeonggi Province, last week, the vice chairman also visited a field site to urge active financial support from the financial sector.
"To overcome the challenge of housing shortages facing our society, I urge the financial sector to provide stable and reliable funding for housing supply," Vice Chairman Kwon said.
In addition to the Financial Supervisory Service and KAMCO, the meeting was attended by five existing KAMCO Fund managers: Shinhan Asset Management, IGIS Asset Management, Capstone Asset Management, Koramco Asset Management, and KB Asset Management.
The apartment complex in Mapo-gu visited on this day faced the risk of insolvency due to overlapping factors such as instability in the PF market, a sluggish real estate market, and rising construction costs in the second half of 2022.
Subsequently, a KAMCO Fund managed by Shinhan Asset Management was injected, enabling project restructuring, a transition to main PF, and the commencement of construction, resulting in 100% pre-sales for a total of 178 units.
Through this process, a total of 60.5 billion won in KAMCO Fund investments—including 27.5 billion won in KAMCO funds—was injected, normalizing a troubled residential project site valued at approximately 300 billion won.
"With the project suspended, the KAMCO Fund fundamentally improved project viability by changing the project use and the contractor, creating conditions for private capital to flow in," Vice Chairman Kwon evaluated, adding, "It is an exemplary case where the expertise of the KAMCO Fund played a significant role as a catalyst in normalizing troubled project sites."
Previously, the government announced plans through the August 13 Real Estate Measures to newly establish a KAMCO Fund worth around 3 trillion won and inject 1.5 trillion won in government funds to support operational stability.
"If the newly established KAMCO Fund invests as much as 60% of its primary investment purpose into residential project sites, about 18,000 housing units are expected to be supplied," Vice Chairman Kwon promised, adding, "We will explore various financial support measures to stimulate housing supply."
Jung Jung-hoon, President of KAMCO, also responded by saying, "In alignment with the government's August 13 measures, we will promptly establish a new 3 trillion won fund by the first half of next year to robustly support housing supply and the vitality of the construction and financial ecosystems."
According to KAMCO, the 1.1 trillion won KAMCO Fund established in September 2023 has completed investments totaling 819.3 billion won to date.
Of this amount, 373 billion won has been invested in residential project sites, with approximately 3,881 housing units scheduled to be supplied.
(Photo: Yonhap News)
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