KB부동산신탁

Overview of REITs
(Real Estate Investment Trusts)

A real estate indirect investment product that aims to raise funds from multiple investors by issuing shares, invest them in real estate, manage them, and then distribute the profits (real estate rental income, development gains, sales gains, etc.) to investors.
Provide more than 30% of the total issued shares to public subscription (with an individual investment limit of 35% (temporary until 2012), and up to 70% for pension funds).
Invest and manage at least 70% of total assets in real estate
Distribute at least 90% of distributable earnings
- Corporation form of company under commercial law

※ Minimum capital within 6 months of business license: Self-managed REITs 7 billion KRW, Entrusted/Corporate Structure REITs:5 billion KRW.

Issue to raise funds
Real estate rental income
Development gains
Gain on sale
Distribution to investors

Benefits of REITs

1A real estate securitization (liquidation) investment vehicle that links real estate with the capital market.
2Real estate is traded in the form of stocks (equity), increasing the liquidity of the property.
3Enables large-scale real estate acquisitions and sales through the participation of numerous investors.
4Advancement and transparency of the real estate market.
5Providing high-quality real estate investment opportunities to small investors who have difficulty accessing real estate investments.
6By securitizing real estate and circulating it in the capital market, facilitate the smooth sale of real estate for restructuring purposes.

Tax Benefits

30% reduction in acquisition tax. Separate taxation on ownership tax.
Comprehensive real estate tax exemption. Corporate tax reduction when more than 90% of distributable profit is distributed as dividends.

Stability

Expecting reduced investment risk through diversified investment (joint investment by institutional investors, etc.).
Stable and Predictable Cash-Flow (Rental + Management Revenue)

Liquidity

Free to trade via stock market listing (if listed)

Profitability

Pursuit of stable dividend income through rental income.
Expecting a gain on sale when real estate prices rise

Transparency

Separation of ownership and operations.
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※ Remuneration criteria : Decision to be negotiated in the asset management contract between the REIT and the Company (Type of remuneration : Asset purchase fee, asset management fee, asset disposal fee, performance fee, etc.)

REITs' business structure

* AMC : Asset Management Company (KB Real Estate Trust was licensed by the Ministry of Land, Infrastructure, and Transport in 2002)

Types of REITs

Classification	Self-managed REITs	Trust-managed REITs	Corporate Reorganization REITs (CR-REITs)
Corporate	Tangible company	Company on paper	Company on paper
Overview	A corporation under commercial law that specializes in real estate investment, has full-time employees including asset management professionals, and directly carries out the investment and management of assets.	A company that entrusts the investment and management of assets to an asset management company and does not require full-time employees, essentially a paper company.	A paper company in the form of a mutual fund specializing in corporate restructuring real estate, where the investment and management of assets are entrusted to an asset management company.
Investment target	· General Real Estate · Development Project	· General Real Estate · Development Project	· Real estate for corporate restructuring · Development Project

Classification	Trust-managed REITs
Corporate	Company on paper
Overview	A company that entrusts the investment and management of assets to an asset management company and does not require full-time employees, essentially a paper company.
Investment target	· General Real Estate · Development Project

Classification	Corporate Reorganization REITs (CR-REITs)
Corporate	Company on paper
Overview	A paper company in the form of a mutual fund specializing in corporate restructuring real estate, where the investment and management of assets are entrusted to an asset management company.
Investment target	· Real estate for corporate restructuring · Development Project

※ A development-specialized REIT is a REIT that invests 100% in development projects, established in the forms of [Development-Specialized Self-Managed REIT], [Development-Specialized Trustee-Managed REIT], and [Development-Specialized Corporate Restructuring REIT].

* CR-REIT : Corporate Restructuring Real Estate Investment Trust