Corporate Real Estate: South Korea

A Q&A guide to corporate real estate in South Korea. This Q&A is part of the PLC multi-jurisdictional guide to corporate real estate. For a full list of jurisdictional Q&As visit www.practicallaw.com/realestatehandbook.

Yon Kyun Oh, Kwon Lee and Kyung-Hee Choi, Kim & Chang
Contents

The corporate real estate market

1. What have been the main trends in the real estate market in your jurisdiction over the last 12 months? What have been the most significant deals?

With the economy recovering more quickly than expected and a more active investment market than anticipated, transaction volume has increased in 2009. This trend is predicted to continue in 2010, according to many real estate investment surveys. Local investors, including wealthy individuals and local pension funds who seek a stable return on investment, are participating more actively in the market. However, the currently capped interest rates may be unattractive to other opportunistic investors. There is continuing interest in investment from foreign core funds seeking long-term returns, particularly in the commercial building sectors in the:

  • Seoul Central Business District.

  • Yeouido Business District.

  • Kangnam Business District.

The bidding process to acquire these buildings remains highly competitive.

Some of the most significant deals in the last 12 months include the:

  • Acquisition of a 50% ownership interest in Center1 Building in Seoul from Bank of America Merrill Lynch by a Korean real estate fund established by Mirae Asset MAPS Global Asset Management Co Ltd. for about KRW550 billion (as at 1 September 2010, US$1 was about KRW1,200).

  • Acquisition of the Samsung Headquarter Building in Seoul by Samsung Life Insurance Company for about KRW504.8 billion.

  • Acquisition and leaseback of Newcore Gangnam Outlet Store in Seoul by a GIC-owned real estate investment trust (REIT) for about KRW220 billion.

With relatively low interest rates and a competitive commercial building sector, the development and construction of major landmark complexes and buildings have become a major trend since 2004. This has been driven by private sector investors and local governments wishing to:

  • Undertake high profile real estate developments.

  • Attract foreign direct investment.

  • Accommodate the business interests of international and local developers.

  • Keep up with public demand.

The value of these large-scale developments and construction projects currently totals about KRW120 trillion, including the:

  • International Business Complex Project in Yongsan (about KRW31 trillion).

  • Alpha Dome City in Paju (about KRW5 trillion).

  • Digital Media Centre Project in Sangam-dong (about KRW3.3 trillion).

However, since the global economic crisis in 2008, many of these large-scale development projects have encountered difficulties in obtaining financing for land acquisition and development costs.

 

Real estate investment

2. Please briefly outline the opportunities for investing in real estate in your jurisdiction. In particular, consider:
  • The structures commonly used (for example, property companies and partnerships).

  • Are real estate investment trusts (REITs) available? If so, are they commonly used?

  • Institutional investors.

  • Private investors.

Structures

Governmental authorities have continued to provide increasingly more flexibility into tax efficient real estate investment structures that are favourable to foreign investors.

However, additional regulatory clarity and consistency is needed in certain areas, due to the lack of precedents on specific issues.

The following investment structures are commonly used:

  • Project finance vehicles (PFVs). Under the PFV structure, a financial institution must hold at least 5% of the equity interest. The PFV is the most popular structure for development projects due to its various tax benefits (see Question 19).

  • Asset-backed securitisations. (ABSs). Despite its stringent legal and internal regulatory requirements such as "originator" qualifications, this structure continues to be one of the structures considered to acquire commercial buildings due to its various tax benefits (see Question 19).

  • Real estate investment trusts (REITs). REITs are available in South Korea and provide tax-efficient investment structures for investors. However, they have not been as active in South Korea as Singapore REITs (S-REITs) or Japanese REITS (J-REITs).

    Among the REITs recognised under the REITs Act, private investors most commonly invest through corporate restructuring REITs (CR-REITs), which can only invest in real estate assets sold by companies undergoing restructuring. This is because unlike other types of REITs, CR-REITs are exempt from the public offering requirement and allow a higher percentage of ownership by a single owner. With the increase in the number of companies undergoing restructuring to recover from the recent economic downturn, investment opportunities for CR-REITs are also expected to increase.

    In addition, recent amendments to the REITs Act announced in 2010 aimed at boosting the recovery of the real estate market and promoting the use of REITs have made REITs even more attractive to investors. These amendments include:

    • a reduction in a REIT's minimum required paid-in capital at establishment and during operation;

    • shortening the restricted period for the disposal of commercial property (from three years after the acquisition to one year after the acquisition);

    • a reduction from 30% to 20% in the minimum percentage of shares required to be publicly offered by a REIT (other than CR-REITs, which are not subject to any public offering requirement);

    • an increase from 30% to 35% in the maximum percentage of shares owned by any single REIT shareholder (other than CR-REITs, which are not subject to any maximum ownership caps).

  • Real estate funds (REFs). The Indirect Investment Asset Management Business Act, which regulated REF structures, has been replaced by the Financial Investment Services and Capital Markets Act (FSCMA), which provides for increasingly diverse real estate financing and investment methods. The trust-type REF has been the most commonly used REF structure due to the relatively simple governmental approval process, because the structure does not involve incorporation of an entity. Among the company-type REFs, the yuhan heosa (limited liability company) type is gaining interest among foreign investors.

The various tax benefits and increasing flexibility afforded to the asset-backed securitisation (ABS), REIT and real estate fund (REF) structures in response to investors' demands have encouraged investors to increase their use of these special investment structures.

Investors

The following types of investor are active in the corporate real estate market:

  • Institutional investors, such as:

    • life insurance companies;

    • pension funds;

    • other public organisations.

  • Private investors, such as:

    • real estate funds;

    • private equity funds.

  • Domestic and foreign companies.

  • Wealthy Korean individuals.

 

Real estate legislation

3. Please briefly set out the main real estate legislation that applies in your jurisdiction.

The main real estate legislation includes the:

  • Civil Code.

  • Commercial Code.

  • Real Estate Registration Act, which regulates court registration of these real estate rights.

  • National Land Planning and Use Act, which deals with administrative regulation on the zoning and use of land.

  • Building Code, which outlines procedures related to construction and building use.

There is also specific legislation for particular situations, such as the:

  • Industrial Complex Act, which regulates the development and use of industrial complexes and the establishing of factories.

  • Act on Free Economic Zone, which provides for special treatment of real estate located in free economic zones. These are designated areas which provide certain tax benefits to qualified investors.

  • Act on Foreigners' Land Ownership, which regulates certain procedures required for the acquisition of land in Korea by foreign persons.

 

Title

4. Please briefly state what constitutes real estate in your jurisdiction. Is land and any buildings on it (owned by the same entity) registered together in the same title, or do they have separate titles set out in different registers?

There is a dual title registration system for land and buildings on land, which constitute separate real estate in South Korea. Therefore, to construct and own a building on a parcel of land, the owner of the building must either:

  • Own the underlying land outright.

  • Have a leasehold interest or a superficies right over the land. A superficies right is the right to use the underlying land in order to own the structure which is on the land, but without holding the ownership interest of the land.

In addition to separate title registries, the local government maintains separate ledgers for land and the buildings on them. Certain administrative information concerning real property is shown in the ledgers.

 
5. How is title to real estate evidenced, for example by registration in a public register of title? Which authorities manage the public title register?

The relevant local court registry office manages the real estate title registry. Registration in the register is generally required to perfect a transfer of title to real estate (except for transfers which arise by operation of law). Registration of title constitutes prima facie evidence of title.

The order of priority among interests in real estate (including security interests) is determined by the order of registration with the court office. In addition, certain statutory liens, such as tax claims by the government, have higher priority over registered security interests.

 
6. Please briefly set out the information and documents registered in the public register of title, for example a description of the real estate, the owner, matters affecting the title and any relevant documents.

The most important information shown in a real estate title registry is the:

  • Property address.

  • Description of the real estate, such as the size and designated usage.

  • Name and address of the owner.

  • Sales price in case of ownership transfer by sale and purchase.

  • Acquisition date of ownership.

  • Type, holder and date of encumbrances.

The underlying documents under which title is transferred or a security interest is created are not publicly available. These documents are submitted to the court registration officer to register the existence of the relevant interest in the real property.

 
7. Can confidential information or documents be protected from disclosure in the public register of title?

The information set out in the title registry is public information. However, the underlying documents transferring title or creating a security interest are not publicly available (see Question 6).

 
8. Is there a state guarantee of title? Is title insurance available? If so, is it commonly used?

The state does not guarantee title. Title insurance is available but has not been widely used. However, the importance of title insurance, title searches and due diligence on title is becoming apparent since relying solely on the public title registry is not guarantee of title. It constitutes prima facie evidence of title (see Question 5).

 
9. How can real estate be held (that is, what types of tenure exist)?

The only freehold ownership right is complete ownership, which is similar to the Anglo-American law concept of fee simple absolute.

The partial estates recognised in Anglo-American law do not exist under South Korean law, such as:

  • Life estates (ownership valid only during a certain person's lifetime).

  • Future interests (ownership valid from a certain point or contingency in the future.

A widely used form of joint ownership is tenancy in common (Gongdong Soyu). Depending on the relationship among the joint owners, tenancy in common can be divided into:

  • Gongyu. In a Gongyu situation, which typically arises in the event of inheritance of an estate, two or more persons share an undivided interest in real property. Because none of the joint owners are related to one another, other than as joint owners, each has fully independent control over its own portion, and each joint owner may sell its share freely. In the downtown Seoul area, there are a number of plots of land owned under a Gongyu tenancy.

  • Hapyu. In a Hapyu situation, the joint owners own the property as a partnership. Therefore, one joint owner requires the other joint owners' consent to transfer its portion of the ownership. Until the partnership is dissolved, one joint owner cannot request separation of its interest in the jointly owned property.

  • Chongyu. A Chongyu situation is widely used by religious organisations holding real property. In a Chongyu situation, the disposition of the real property requires consent of the members of the church.

Of the three forms of tenancy-in-common, Gongyu is the most popular and widely used, while Hapyu and Chongyu are used rarely and only in special circumstances. There are three types of leasehold interest:

  • A chonsei lease, which is a type of leasehold interest unique to Korea. In a chonsei lease, the tenant gives a lump sum refundable deposit (that is, a key money deposit, which is essentially an interest free loan) to the landlord at the beginning of the lease term. This is in exchange for a reduction or elimination of the periodic rental payments. At the end of the chonsei lease term, the principal amount of the key money deposit is returned to the tenant. Periodic rental payments, if any, are not returned.

  • A monthly lease.

  • A pre-paid rental lease.

These leasehold interests are created contractually. However, a leasehold contract does not, in itself, secure the return of the deposit on expiry or termination of the lease. The contract does not guarantee the use of the leased premises for the entire lease term if certain adverse events take place (such as on transfer of the property by the owner during the lease term). To protect these rights, the tenant can register its leasehold right with the relevant court office. In addition, certain small or residential leases receive additional protection under the Commercial Building Lease Protection Act and the Housing Lease Protection Act.

Superficies rights and easements can also be created contractually, and in certain cases, by operation of law.

 

Sale and purchase of real estate

10. What are the main stages and documents in the sale and purchase of real estate? In particular:
  • How is real estate marketed, when does commercial negotiation occur and what pre-contractual arrangements are used?

  • When is the sale contract negotiated and executed?

  • When are the parties legally bound?

  • When is the change of title registered?

  • When does title transfer and what are the formal legal requirements to transfer real estate (for example, in writing and signed by the parties)? Is notarisation required?

Marketing

An estate agent usually markets the real estate and acts as the broker between a buyer and seller.

Commercial negotiation

The parties usually conduct the commercial negotiations, assisted by realtors. Lawyers are usually involved during the negotiation of large commercial real estate transactions and most real estate transactions involving foreign parties.

Pre-contractual arrangements

Parties sometimes enter into a pre-contractual memorandum of understanding, setting out the key terms and conditions of the property sale and purchase. The memorandum of understanding can be legally binding or non-binding.

Sale contract

In a typical real estate transaction, a sale and purchase agreement is the main transaction document.

When legally binding

Parties are legally bound on execution of the sale and purchase agreement or a binding memorandum of understanding.

Registration

The relevant court office issues a certificate of registration (Dungki-Pil-Jung), which is equivalent to a title deed. This certifies that ownership has been registered.

When title transfers

Title transfer for real property is effective on registration in the relevant registry of real property by the court office (see Question 5). For a title transfer registration application, the court registry office must receive the following documents:

  • A written contract for transfer of title, such as the sale and purchase agreement.

  • The seller's certificate of registration.

  • A power of attorney to apply for title transfer registration issued by the seller.

  • The seller's certificate of seal impression issued by local government authorities. In South Korea, a person's seal is commonly used as a method of verification or authentication of his written decisions. The certificate of seal impression proves that the seal has been legally registered.

Notarisation of these documents is not required.

 
11. Does a seller have any statutory or other liability to the buyer in a disposal of real estate, for example to disclose real estate information, or in relation to title?

The Civil Code provides for an implied warranty from the seller relating to defects (such as soil contamination or buried waste). The warranty can be contractually overridden or amended. However, if a seller knows of a defect but does not disclose it to the buyer, the seller is liable for this defect, even if the buyer waived warranties in the sale and purchase agreement (Civil Code).

 
12. Please briefly outline the real estate due diligence that is typically carried out before an acquisition (including title investigation and searches of public authorities).

Legal due diligence typically comprises the following:

  • Verification of ownership through title search and review of title registry.

  • Identification of any registered or unregistered encumbrances on the real estate.

  • Verification of compliance with relevant laws and regulations concerning construction and the use of real estate.

  • A review of material contracts entered into in relation to the use and management of the real estate (such as leases and property management agreements).

  • Identification of any restrictions on use or disposition of real estate (whether statutory or contractual).

 
13. What real estate warranties are typically given by a seller to a buyer in the sale of corporate real estate and what areas do they cover?

A seller does not typically give any representations or warranties in relation to defects. Real estate is generally sold on an "as is" basis.

However, where foreign entities or domestic financial institutions are involved, parties typically provide standard representations and warranties seen in international transactions.

If a seller knows of a defect but does not disclose it, the seller is liable for the defect (see Question 11). If the assets being sold are the shares of a company holding real estate (and not the real estate itself), the Civil Code's implied warranty relates to the shares rather than to the real estate.

 
14. Can an owner or occupier inherit liability for matters relating to the real estate even if they occurred before it bought or occupied it? For example, environmental liability, or liability under a lease.

The owner is generally liable for matters relating to the real estate, even if the causal event occurred before the owner obtained title. The exception is environmental liabilities, which generally remain with the party that caused the contamination, unless this party cannot be identified. In this case, the current owner is liable.

 
15. Does a seller or occupier retain any liabilities relating to the real estate after it has disposed of it? For example, environmental liability, defects in the real estate, and contractual liability to the buyer.

Even after the sale of the real estate, an owner or occupier generally retains liability for environmental matters which it has caused (see Question 14).

 
16. What costs are usually paid by the buyer? What costs are usually paid by the seller?

Buyers and sellers generally pay the fees of their respective advisers and service providers. In a sizeable transaction, each party independently retains an agent and pays their commission.

 

Real estate tax

17. Is value added tax (VAT) (or equivalent) payable on the sale or purchase of real estate? Who pays? What are the rates? Are there any exemptions?

The seller collects VAT at 10% of the purchase price of the buildings from the buyer. Land is not subject to VAT. The collected VAT is paid by the seller to the tax authorities.

If a buyer runs a business and registers as a business entity with the tax office within 20 days from the conclusion of the sales contract, the VAT paid by the buyer to the seller is refundable to the buyer.

VAT is not charged on the purchase price if the buildings are transferred as part of a comprehensive business transfer.

 
18. Is stamp duty/transfer tax (or equivalent) payable on the sale or purchase? Who pays? What are the rates? Are there any exemptions?

The buyer must pay the following taxes in connection with the sale and purchase of real estate:

  • Registration Tax (including surtax) at 2.4% of the purchase price (or 7.2%, if the real estate is in the Seoul Metropolitan Area).

  • Acquisition Tax (including surtax) at 2.2% of the purchase price (or 6.6%, if the real estate is in the Seoul Metropolitan Area and the building is newly constructed for use as a headquarters).

In addition, the buyer must incur the cost of buying housing bonds (0.8% to 5% of the government-posted standard value of the real estate) although there are certain exceptions. Housing bonds are bonds that are issued by government to finance the development project for small and medium-sized residential properties.

The seller must also pay tax on any capital gains from the sale. Companies pay corporate income tax at 24.2% (including surtax). Individuals pay capital gains tax at rates varying from 6.6% to 77% (including surtax). The tax treaty in place with the relevant foreign jurisdiction regulates the tax paid by foreign entities (including withholding tax) and any exemptions from capital gains tax.

Stamp duty of between KRW20,000 and KRW350,000 is levied for each sale and purchase agreement of real estate.

 
19. Are any methods commonly used to mitigate real estate tax liability on acquisitions of large real estate portfolios?

The use of ABS, REIT, REF and PFV structures provide tax incentives to investors, provided certain requirements are satisfied including a reduction of:

  • Acquisition tax.

  • Registration tax.

  • Taxable income for corporate income tax purposes.

See Question 2, Structures.

 

Holding business premises

20. Are there targets to reduce greenhouse gas emissions from buildings in your jurisdiction? Is there legislation requiring buildings to meet certain minimum energy efficiency criteria? If yes, please give brief details.

Although there is no legislation requiring buildings to satisfy greenhouse gas emission standards or to achieve certain energy efficiency levels, tax benefits are available to buildings designated as "green buildings" by satisfying criteria set out in the Regulation on the Authorisation of Nature-Friendly Buildings.

 
21. Is it common for companies to manage their real estate portfolios and their accommodation needs by using third parties, for example through outsourcing transactions? If yes, please give brief details.

It is common for owners of commercial real estate to use property managers and facility managers to manage the real estate.

 
22. Are there restrictions on foreign ownership or occupation of real estate, or on foreign guarantees or security for ownership or occupation?

No governmental approvals are generally required for foreign persons to acquire real estate. However, when a foreign person acquires land in South Korea, the acquisition must be reported under the Foreigners Land Act, when the land is acquired either:

  • Directly.

  • Indirectly through a company, of which 50% or more of which is owned by the foreign person.

A foreign entity can enter into an agreement to buy or lease real estate in South Korea. A foreign entity can also provide a guarantee or provide collateral security to buy or lease real estate in South Korea. In both cases, the foreign entity must comply with routine reporting obligations under the Foreign Exchange Transactions Regulations. If a foreign entity acquires a Korean company that owns land, the acquisition of interests in land must be reported within six months (Foreigners Land Act).

 
23. Does change of control of a company affect its holdings of real estate?

Change of control of a company does not generally affect its holdings of real estate. However, certain reporting obligations apply to foreign companies under the Foreigners Land Act (see Question 22).

 
24. In what circumstances can local or state authorities purchase business premises compulsorily? Is the purchase price market value?

Central or local governments can only order the Central Land Taking Committee to expropriate private real property when there is a statutory public need. In this case, the the Central Land Taking Committee determines the purchase price, based on all the circumstances, including market value and the government-posted value.

 
25. Are municipal taxes paid on the occupation of business premises, for example business rates? Are there any exemptions?

Local government assess business place tax, though the amount is minimal. An exemption is available for not-for-profit organisations.

 

Real estate finance

26. How are acquisitions of large real estate portfolios or companies holding real estate generally financed?

The acquisition of real estate is generally financed by equity or debt. Debt financing can be achieved by issuing bonds or obtaining secured loans.

 
27. How is real estate commonly used to raise finance?

A mortgage over the real estate is most commonly used to provide security for a loan. A mortgage interest must be registered in the relevant title registry to be enforceable. Once registered, the mortgage holder has priority over subsequently registered security interests over the property. A lender may also require a pledge of the borrower's rights and claims to all revenues generated from the property.

A trust structure is also commonly used to raise finance. Under the trust structure, the borrower transfers ownership of the property to a trustee, who manages the property for the benefit of the lenders until repayment of loan. On repayment, title to the property reverts to the borrower. The trust must be registered in the relevant title registry to be enforceable.

 
28. What are the most common forms of security granted over real estate to raise finance? How are they created and perfected (that is, made valid and enforceable)?
 
29. Is real estate securitisation common in your jurisdiction? If yes, please give brief details.

The ABS structure has been widely used for the acquisition of commercial buildings (see Question 2). The Financial Supervisory Service (see box,Real estate organisations) is the main governmental body that regulates ABS structures under the Asset-Backed Securitisation Act.

 

Real estate leases

30. Are contractual lease provisions regulated or freely negotiable?

The Civil Code provides default lease terms. However, parties can contractually depart from these, provided that Civil Code provisions intended to protect tenants are not overridden. In addition, the Commercial Building Lease Protection Act protects the interests of certain small scale commercial tenants. A landlord can only refuse to renew a lease at the tenant's request when either (Commercial Building Lease Protection Act):

  • The landlord has a justifiable reason.

  • The lease term has exceeded five years.

 
31. How are rent levels usually reviewed and are there restrictions on this? Is VAT (or equivalent) payable on rent?

There is no legal restriction on rent levels, which are subject to negotiation between the parties. Parties generally agree a mechanism for periodic rent adjustment:

  • Based on a fixed rate.

  • Fixed by reference to a relevant index such as the consumer price index or the inflation rate.

However, a 9% cap on annual rent increases applies to certain small scale commercial leases (Commercial Building Lease Protection Act).

The landlord or tenant can request a rent adjustment if existing levels become inappropriate due to changes in the amount of public charges or other changes to its economic situation (Civil Code).

10% VAT is payable on rent.

 
32. Is there a typical length of lease term and are there restrictions on it? Do tenants of business premises have security of occupation or rights to renew the lease at the end of the contractual lease term? If yes, please give details.

There is no typical length of lease term. The lease term is subject to negotiation between the parties, although the (Civil Code):

  • Initial lease term cannot exceed 20 years.

  • Renewal term cannot exceed ten years.

If the tenant perfects its interest by registering his leasehold right in the relevant title registry, the tenant can have security of occupation during the entire lease term, including if there is change of ownership. In addition, a tenant in certain small-scale commercial leases regulated by the Commercial Building Lease Protection Act can have security of occupation by:

  • Completing a business registration.

  • Being in actual possession of the leased premises.

Unless expressly agreed in the lease, the tenant does not have a unilateral right to renew the lease at the end of the lease term. However, a landlord under certain small scale commercial leases cannot refuse lease renewal at the tenant's request (see Question 30).

 
33. What provisions or restrictions typically apply to the disposal of the lease by the tenant (for example, can the tenant assign or sublet the lease with the landlord's consent)?

The tenant's assignment and subletting of a lease require the landlord's prior consent, unless the landlord contractually waives this requirement.

 
34. Can tenants usually share their business premises with companies in the same corporate group? If yes, on what terms?

A tenant cannot generally share its premises with its group companies unless the landlord consents.

 
35. Who is usually responsible for keeping the leased premises in good repair?

The landlord is responsible for keeping the leased premises in good repair, unless agreed otherwise (Civil Code). The tenant is only responsible for repair of minor items which do not impair the tenant's normal use of the leased premises.

 
36. Who is usually responsible for insuring the leased premises?

The landlord is usually responsible for insuring the leased premises against fire and other events. The tenant is responsible for insuring its belongings that it keeps in the leased premises.

 
37. On what grounds can the landlord usually terminate the lease? Please briefly outline any restrictions or procedure that applies. Can the tenant terminate the lease in certain circumstances?

The most common ground for termination is breach of the lease. A lease typically allows the landlord to terminate the lease if the amount of rent owing is two months' worth.

Unless the lease specifically provides for an early termination right by prior notice, neither party can unilaterally terminate the lease before its agreed term without cause.

 
38. What is the effect of the tenant's insolvency (under general contract terms and insolvency legislation)?

The tenant's insolvency is usually specified in the lease as a cause for termination of the lease by the landlord. In addition, under insolvency legislation, if the tenant becomes insolvent, the landlord or the receiver of the tenant's bankruptcy estate can terminate the lease.

 

Planning law/zoning

39. What authorities regulate planning control and which legislation applies?

The Ministry of Land, Transportation, and Maritime Affairs (see box, Real estate organisations) devises the basic plan (see Question 40) at a national level, and local governmental authorities are responsible at a local level. The relevant legislation includes:

  • National Land Planning and Use Act, which deals with administrative regulation on the zoning and use of land.

  • Building Code, which outlines procedures related to construction and building use.

Depending on the type of development, there are special laws regulating the:

  • Development of industrial and residential complexes.

  • Redevelopment of destroyed city areas.

 
40. What planning consents (for example, planning permission or building permits) are required and for which types of development?

Broadly, there are two types of real estate development plan:

  • The basic plan.

  • The implementation plan.

The basic plan is devised by national or local governments.

The implementation plan is devised by an entity wishing to pursue a specific real estate development project. The nature of the implementation plan differs depending on the type of development project (for example, residential, retail and commercial) and the relevant laws. The relevant governmental authority must approve the implementation plan under the relevant laws.

 
41. In relation to planning consents:
  • Which body grants initial planning consents?

  • Do third parties have the right to object? If yes, please give brief details.

  • In what circumstances is there a public inquiry?

  • How long does an initial decision take after receipt of the application?

  • Is there a right of appeal against a planning decision? If yes, please give brief details.

Initial consents

Local government authorities usually review plans and grant initial planning consents.

Third party rights

Interested parties can file objections to basic and implementation plans.

Public inquiries

Public inquiries are generally held for basic and implementation plans.

Initial decision

For both types of plan, the statutory timeframe is generally one to two months. However, this timeframe is not legally binding and can be extended at the discretion of the relevant governmental authority.

Appeals

Appeals can be made to the administrative court.

 

Reform

42. Please summarise any proposals for reform and state whether they are likely to come into force and, if so, when.

There are currently no major reform proposals.

 

Real estate organisations

Ministry of Land, Transportation, and Maritime Affairs (MLTM)

Main activities. The MLTM is an administrative body of the central government, responsible for:

  • Territorial management.

  • Balanced regional development.

  • Enhancing national competitiveness and construction.

  • Operation and management of major infrastructure.

The MLTM also oversees REITs.

W www.moct.go.kr

Supreme Court of South Korea Internet Registry Office

Main activities. This office provides access to court registries of land and buildings.

W www.iros.go.kr

Ministry of Strategy and Finance (MOSF)

Main activities. The MOSF is an administrative body of the central government responsible for medium to long term economic and social development policies, including:

  • Tax.

  • Finance.

  • National treasury.

  • State-owned properties.

W http://english.mosf.go.kr/

Financial Supervisory Service (FSS)

Main activities. Its functions include, along with the MOSF, overseeing and regulating the REF and ABS structures.

W http://english.fss.or.kr/fsseng/index.jsp



Contributor details

Yon Kyun Oh

Kim & Chang

T +822 3703 1062
F +822 737 9091/3
E ykoh@kimchang.com
W www.kimchang.com

Qualified. Korea, 1982; New York, 1991

Areas of practice. Real estate; energy; M&A; foreign direct investment; overseas investment; structured finance; and corporate governance.

Recent transactions/cases

  • Advising two Korean real estate funds established under the old Indirect Investment Asset Management Business Act in their sale of an office building in Gangnam, Seoul.
  • Advising a GIC-owned REIT in acquiring Newcore Gangnam Outlet, Seoul.
  • Advising a Korean subsidiary of a German investment company in acquiring a high-end office building in Yeoido, Seoul.
  • Acting as lead counsel to National Pension Services in acquiring a prime office building in Sydney.

For more details of recent transactions, publications, and so on, see full PLC Which lawyer? profile here.

Kwon Lee

Kim & Chang

T +822 3703 1148
F +822 737 9091/3
E klee@kimchang.com
W www.kimchang.com

Qualified. Illinois, 1993; New York, 2000

Areas of practice. Real estate; foreign direct investment; and energy.

Recent transactions/cases

  • Advising a Korean subsidiary of a European investment company in acquiring a high-end office building in Seoul.
  • Advising a European based investment fund in its sale of an office building in Seoul.
  • Acting as a counsel for a US-based fund in its acquisition of a loan.
  • Advising a European based investment company in its sale of an office building in Seoul.

Kyung Hee Choi

Kim & Chang

T +822 3703 1371
F +822 737 9091/3
E khchoi@kimchang.com
W www.kimchang.com

Qualified. Korea, 1999

Areas of practice. M&A; real estate; environment; foreign direct investment; and energy.

Recent transactions/cases

  • Advising a German based investment fund in its sale of a office building in Yeoido, Seoul.
  • Advising a Korean bank in its sale of buildings in Seoul.

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