Shinhan Asset Management completes pre-sales at Gongdeok Station mixed-use project, marking first result of PF normalization fund

By Jung Yoon-hee, The Herald Business

Shinhan Asset Management said Monday that its Shinhan PF Normalization Fund has fully deployed its committed capital and successfully completed pre-sales for a mixed-use residential development at Gongdeok Station in Mapo-gu, Seoul.

Shinhan Asset Management is one of five sub-managers overseeing funds established under a project financing normalization program run by Korea Asset Management Corp., known as Kamco. Through the Shinhan PF Normalization Fund, the firm invested sequentially in a series of projects — starting with the Namdaemun District 7-1 development, followed by the Gongdeok Station mixed-use complex, a regional mixed-use project, a Seoul office building and a Greater Seoul logistics center — becoming the first of the five sub-managers to fully deploy its committed capital.

Among those investments, Gongdeok Station Xi Rene had struggled to move forward amid the real estate downturn and tightening financial markets in 2022. After the Shinhan PF Normalization Fund stepped in, the project underwent structural reorganization and secured new financing, converting to a full project financing arrangement.

A special supply round held in April drew 6,662 applicants for 94 units, a competition ratio of 70.87 to 1. The first-priority subscription round received 6,639 applications for 83 units, a ratio of 79.99 to 1. Combined, 13,301 people applied across both rounds. After a ballot for unit assignments among qualified buyers and alternates, all contracts were signed within four days of sales opening.

Shinhan Asset Management has carved out a differentiated position in equity investment for development projects among domestic comprehensive asset managers. Building on its experience running the PF normalization fund, the firm has also established the Shinhan RE Rebalancing Fund to expand investment across a broader range of development projects.

"The completion of pre-sales at Gongdeok Station Xi Rene is a prime example of fulfilling the policy goal of supporting a soft landing for the real estate PF market while delivering stable returns to investors," a Shinhan Asset Management official said. "We will continue to lead the revitalization of the development finance market and the supply of quality housing, backed by differentiated risk management and strong investment capabilities."

Shinhan Asset Management has also recently committed 116.3 billion won (about $76.5 million) to a science and technology innovation fund, selecting eight sub-managers and forming venture funds worth more than 319.1 billion won. The science and technology innovation fund is a public-private partnership vehicle that holds and manages research and development capital from national R&D programs, with Shinhan Asset Management serving as the mother fund operator.