Listed Firms Hoard Record 107 Trillion Won in Non-Business Real Estate

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1. Listed Companies Have 107 Trillion Won Tied Up in Non-Business Real Estate

- Key Summary: A comprehensive survey by The Seoul Economic Daily and Truston Asset Management found that 2,554 KOSPI and KOSDAQ-listed companies hold combined investment property worth 107.89 trillion won. Cases of excessive holdings unrelated to core business have emerged, such as Ehwa Industrial, whose investment property of 204.3 billion won is approximately five times its market capitalization of 42.6 billion won. Following President Lee Jae-myung's remarks at the National Economic Advisory Council on the 9th to "review measures to impose substantial holding burdens" on corporate non-business real estate, forecasts suggest large-scale corporate property disposals may follow. "Capital market funds should be invested in newly growing companies and markets, not non-operating real estate," said Yoon Sang-nyeong, head of the engagement team at Truston Asset Management.

2. Stocks Make You Dizzy, Crypto Scares You... Time to Switch to Stable REITs?

- Key Summary: As asset market volatility reaches extremes amid the Iran war aftermath, the combined market capitalization of 25 listed REITs reached 10.3 trillion won, surpassing 10 trillion won for the first time in the 25 years since REITs were introduced in Korea. When KOSPI fell 6.2% from 6,244.13 to 5,858.87, the KRX Real Estate REITs Infrastructure Index rose from 1,415.91 to 1,432.20. Year-to-date returns remained solid for Hanwha REIT (451800) at 35.59%, Samsung FN REIT (448730) at 26.33%, and Lotte REIT (330590) at 20.45%. The government specified plans to pursue separate taxation benefits for REITs in its '2026 Economic Growth Strategy,' creating expectations that tax rates could fall from a maximum of 49.5% to 9.9% starting next year. However, market uncertainty persists, with Hana Office REIT withdrawing its KOSPI listing amid concerns of prolonged war.

3. Comprehensive Property Tax Hike and New Property Tax Base Likely... Lending Restrictions Also Being Considered

- Key Summary: The Presidential Office and relevant ministries plan to overhaul the taxation system for corporate non-business real estate soon. Currently, the comprehensive real estate tax rate for non-business land is 1-3%, more than four times higher than the 0.5-0.7% for business-use property, with deductions limited to 500 million won compared to 8 billion won for business-use property. The government is reportedly reviewing deduction reductions, subdivision of tax brackets, rate increases, and even creation of a separate property tax base. However, Professor Seo Jin-hyung of Kwangwoon University warned, "There are concerns that companies may face difficulties in timely utilizing real estate for business purposes during expansion processes."

4. BOK Governor Lee Chang-yong's 'Final Rate Decision'... 7th Consecutive Rate Freeze

- Key Summary: At Bank of Korea Governor Lee Chang-yong's final Monetary Policy Board meeting during his tenure, the base rate was held at 2.50% for the seventh consecutive time. The decision came amid heightened economic uncertainty due to the Iran war, and the interest rate environment for the real estate market is expected to remain at current levels for the time being. Analysts note that monetary policy direction under the next governor could become a variable for the real estate investment environment.