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ABOUT US

Real Estate Trust

Information

Careers

KORAMCO TRUST

REITs

Real Estate Trust Performance

Share

Borrowing type land trust Boryong joint house of dong on dong

Trust Market Trend

Domestic real estate trust company
yearly order obtainment performance
KRW 1.884 trillion compared with the
previous year growth rate of 6.4%

Due to internal and external uncertainties, despite depression prospect of construction/real estate market, last year's real estate trust market size recorded the highest level of KRW 1.844 trillion.
Compared with non-borrowing trust of the traditional service type, borrowing land trust project has focused orders of trust companies, which is main cause of the growth of trust market. However, borrowing type land trust can cause liquidity risk from non-sale of houses and shopping districts. For that reason, trust market is expected to be reorganized into large trust company centered one with risk management capability and funds.
In addition, in September 2015, because of urban and residential condition maintenance law revision, in maintenance projects such as redevelopment and reconstruction, participation by trust companies became possible and order obtainment of trust companies is another pillar of trust market growth.

Real estate trust company's order obtainment trend

Major Achievements
and Financial Achievements

Steady growth through new order of KRW 73.1 billion

Offering differentiated service and new project composition KORAMCO grows into a leading trust company through differentiated service than rival companies and offering of new project composition despite the fact that it is a late mover which entered real estate trust business in 2006.
Last year KORAMCO earned new contracts of KRW 73.1 billion created operating profit of KRW 69.8 billion.
This results reflect the risk management through thorough project analysis and legal and technology business strengthening.
KORAMCO renewed maximum operating profit every years and it will do its best for sustained growth.

For the first time as a trust company, entering house reconstruction business and stable implementation KORAMCO is implementing developmentㆍmanagementㆍoperation businesses of reconstruction business in place of reconstruction association based on systematic legalㆍtechnologyㆍsales capability and capital.
In particular, it has urban maintenance project headquarters specialized in urban maintenance and two maintenance project teams under the headquarters, and obtained house reconstruction projects in Anyang Hogye, the business proxy method house reconstruction projects for the first time as a trust company.
Business site in Hogyedong saw successful sale contracts of association members and general public, and the construction was smoothly processed and expected to be comleted in spring on 2019.
KORAMCO is a trust company which has Korea's first trust method maintenance project implementation experience, and it is expected to be the best partner by expanding the service areas not only through business proxy method but also through unilateral implementaion method.

KORAMCO asset in trust sales profit trend

Risk Management

In 2008, since land trust the first order obtainment, zero shoddy business place

Differentiated order obtainment and management system KORAMCO REITs & Trust obtains projects through detailed review by risk management committee directly under CEO, trust project deliberation committee, and a separate organization of risk management team, Through differentiated order obtainment method and project management system, we make efforts to meet the needs of a trustor, a constructor, a priority beneficiary, purchasers, and project related persons.

In addition, in the trust law team, there are three in-house lawyers and through cooperation with major law firms in Korea law risks are managed on a real time basis. KORAMCO has not a single shoddy business place since the first order of land trust in 2008 through differentiated order obtainment and management system.

Since 2008, land trust project status

Classification Number Ratio
Trust cancellation project site after construction completion 69 42%
Trust cancellation project site before construction completion 4 2%
Project site of construction completion 23 14%
Project site under construction 57 35%
Project site before construction 11 7%
Total 164 100%

Order Portfolio

Ratio of land trust to sales at 92.6%

Risk minimization through selected borrowing type land trust order obtainment
Borrowing type land trust product is the method of implementing development projects by putting in capital by a trust company, even though there are big risks, the trust return is very high compared with non-borrowing type trust.

KORAMCO asset in trust determines project feasibility and whether it obtains orders or not by holding prior review meeting and trust project deliberation committee in order to selectively obtain orders of borrowing type land trust with this traits. In addition, through management business by staff members of sales team and support headquarters (planning·law·technology·accounting) with rich experience and capability, for recent 7 years, order obtainment growth rate of 30% per year was realized.

Borrowing type land trust order obtainment status in 2017

Order obtainment diversification (maintenance project, non-residentail facilities)
KORAMCO asset in trust has mainly focused on residential facilities such as joint house, officetel, urban living house, and multipurpose building since entering land trust market. However, in the year 2017, not only these residential facilities, but also maintenance projects such as urban environment maintenance project, house reconstruction, residential material development and various projects such as knowledge industry center, golf course, and living accommodations, implementing various divarication.

Project region diversification
KORAMCO asset in trust is implementing projects across the nation including Seoul, metropolitan area small cities in provinces in comprehensive consideration of project stability and sales feasibility.

In addition, by composing optimal products for each region such as the region with low house supply rate, region with high renting demand and development changes, regions with decrepit buildings and insufficient infrastructures, and regions near industrial complex and region with many venture companies, we meet the needs of trustors and purchasers.

Project Ration by Region (unit : KRW million)

Project Ration by Construction Type (unit : %)