Korea adopted REITs (real estate investment trusts) in 2001 to help economic
recovery after the 1997 financial crisis. Over the past 16 years, the Korean
government has tried to reflect market demands on the REITs system and to
prevent its side effects with a series of revision. In spite of these efforts, Korean
REITs has not been active compared with those in advanced countries like the
US. It is required to improve market and institutional environments for
promoting the growth of REITs in Korea.
REITs, which raises funds from general investors, invests and manages them
in real-estate markets, shares returns among investors, is subject to the “Real
Estate Investment Act”. As it is mentioned in the Act, the main purpose of
REITs is to provide general people with various opportunities of real-estate
investment, stable returns and tax benefits.
However, current status of Korean REITs has institutional and noninstitutional
problems, obstructing the achievement of its purposes. In this
study, I investigate those problems in various aspects. In addition, considering
the interests of REITs industry, government and legislative body, I try to make
suggestions for promoting the growth of Korean REITs and its system.