“373.1 billion won invested to normalize PF”... Six of seven residential project sites have yet to break ground

[Financial News] Six of the seven residential project sites in which the Korea Asset Management Corporation invested to normalize distressed real estate project financing (PF) projects have yet to begin construction, it has been found. The fund investment in these sites alone exceeded 300 billion won.
According to data submitted by the Korea Asset Management Corporation (KAMCO) on the 20th to Rep. Park Seong-hun of the People Power Party, a member of the National Assembly’s Political Affairs Committee, the PF Normalization Support Fund had invested in 16 project sites as of the end of August, seven of them residential. The fund is a program designed to normalize distressed projects by restructuring their debt and supporting permitting, financing and other needs.
The fund’s investment in the seven residential project sites totaled 373.1 billion won. Only one site, in Seoul’s Mapo-gu district, had actually begun construction. As of August, the six sites in Seoul’s Jung-gu and Geumcheon-gu districts, Daejeon’s Yuseong-gu district, and Namyangju, Hwaseong and Anseong in Gyeonggi Province had yet to break ground. Investment in the six sites where construction had not started totaled 312.6 billion won, or 83.8% of all investment in residential projects. The sites are expected to supply a total of 3,703 housing units.
At some sites, construction has yet to begin nearly three years after investment. A site in Seoul’s Jung-gu district received an investment of 67 billion won in September 2023 but had still not begun construction by the end of August this year. Talks with the construction company are underway, and the expected completion date has been pushed back by one year and five months, from August 2029 to January 2031.
A site in Daejeon’s Yuseong-gu district received 70.1 billion won in October 2024 but remains at the stage of securing main PF financing. Its expected completion date has been delayed by one year and seven months, from April 2029 to November 2030.
Even the sole site to have begun construction, in Seoul’s Mapo-gu district, did not break ground until this February, about one year and nine months after the investment in May 2024. As of the end of August, construction was 9.64% complete, and the expected completion date had also been pushed back by one year.
KAMCO classified the Mapo-gu site as having completed normalization, citing the completion of sales and ongoing construction. The other six residential project sites were all classified as still undergoing normalization.
Rep. Park Seong-hun stressed, “Several hundred billion won has been invested to rescue distressed project sites, yet most residential projects have not even broken ground. The government and KAMCO should not tout the scale of the investment as if it were an achievement. They must thoroughly examine the reasons for construction delays and the likelihood of recovering the investment, and manage the projects so that they are actually normalized.”
[email protected] Park Mun-su Reporter