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[Alpha Biz=(Chicago) Reporter Paul Lee] Overseas real estate funds sold by banks were also exposed to the risk of massive losses due to the impact of the global real estate recession, the report showed. If the real estate market fails to rebound, there is a concern about a possible loss next year.
According to the financial sector on the 19th, the balance of overseas real estate funds sold by the five major banks (KB Kookmin, Shinhan, Hana, Woori and NH Nonghyup) totaled 753.1 billion won.
Among them, the arrival in the first half of next year is 106.1 billion won. The maturity of the fund worth KRW 151 billion will return in the second half of the year.
Except for Nonghyup Bank, which did not sell overseas real estate funds other than the REITs fund without maturity, each bank held at least 100 billion won in sales balance.
Overseas real estate funds collect investments to acquire stakes in overseas commercial real estate or secure ownership, pay dividends as rental income, and sell assets before maturity to make final profits.
Loss can occur if the selling price is lower than the real estate purchase price. The market slump will result in losses as the sale itself cannot be done.
The problem is that since the pandemic, the global real estate market has been frozen due to an increase in office vacancies due to the spread of telecommuting and a decrease in demand for real estate investment due to high interest rates. Funds that originally aimed at a return of 6 to 7 percent have to worry about losing their principal at this point.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
