Korea Developer Association, KB Securities to launch real estate equity fund

The Korea Developer Association and KB Securities are launching a real estate development equity fund to help developers struggling to secure early-stage financing.

The association signed an MOU with KB Securities on Thursday to jointly establish the fund, aimed at revitalizing domestic real estate development financing and expanding new housing supply.

Under the agreement, the two organizations will build a mutual cooperation model to modernize domestic development financing and support small and mid-sized developers hit by recent project financing (PF) reforms and a tightening of bridge loans. The fund will support equity capital expansion at high-quality project sites in the Greater Seoul area in line with the government's Aug. 13 housing supply policy, with the goal of reducing reliance on high-interest borrowing and stabilizing the financial structure of development projects.

The fund also marks the first concrete step toward the "financial seed-money fund" that Korea Developer Association President Kim Han-mo pledged when he took office in February. Kim has said he intends to put back on track projects that have stalled due to insufficient initial capital despite having secured prime development sites and the necessary permits.

The association will draw on its network of more than 1,000 member companies and over 2,200 registered development operators to identify high-quality projects in the field, while KB Securities will contribute professional financial screening and management infrastructure to help accelerate ground-breaking and ensure smooth project launches.

"This will serve as a foundation for meeting the public goal of expanding housing supply while opening new opportunities for member companies and young talent aspiring to become developers," Kim said. "Building on the fund's successful establishment, we will continue to create seed-money funds going forward and lay the groundwork for a mutual aid association — a long-held wish of the industry."

Moon Seong-cheol, a group head at KB Securities, said the firm would use its accumulated experience arranging PF for large landmark developments and its operational expertise to strengthen developers' equity capital and build stable financial structures. "Through our partnership with the association, we will contribute to a soft landing for the PF market and the advancement of development financing," Moon said.

Following the MOU signing, the two organizations plan to begin identifying project sites and providing investment support in earnest after working-level consultations and briefing sessions.

Meanwhile, the Korea Developer Association serves as the representative body for domestic real estate developers, playing a central role in policy advocacy, professional workforce development, and the protection and promotion of the industry. The association is also working with the Korea Overseas Infrastructure and Urban Development Support Corporation to help domestic developers expand into overseas urban development projects.