HanmiGlobal AMC CEO Lyou Byeong-ki poses at his office in Seoul, Tuesday. Courtesy of HanmiGlobal
Project management firm’s subsidiary seeks to turn crisis into opportunity
By Park Jae-hyuk
“Difficulty” and “uncertainty” were the keywords HanmiGlobal Chairman Kim Jong-hoon used in his New Year address to describe this year’s market environment.
Although HanmiGlobal maintained solid earnings last year with profits from its global business, the prolonged slowdown in the domestic housing market is still seen as an unfavorable factor for Korea’s leading construction project management company.
Its asset management subsidiary has therefore been trying to turn the current crisis into opportunity, living up to the chairman’s request to think outside the box.
“The market has always been like two sides of a coin,” HanmiGlobal AMC CEO Lyou Byeong-ki told The Korea Times in a recent interview. “The worse the situation gets, the more market insiders find investment opportunities.”
Lyou forecast that this year’s real estate market will be as bad as last year’s, citing the growing delinquency ratio on real estate project financing loans.
However, he said there should be a greater opportunity in terms of trading nonperforming loans (NPLs) in light of the increase in project financing loans facing events of defaults. Investors generally anticipate returns from their purchase of NPLs, as they can profit from sales of related properties at auctions.
“We plan to look for NPLs related to logistics complexes, which are seen to have been oversupplied,” the CEO said.
HanmiGlobal AMC is also considering investing in rental housing, as many foreign investors do lately.
“We should always pay attention to foreign investors, who have raked in huge profits through preemptive investments,” the CEO said. “Due to the weaker Korean won and the falling value of domestic properties, global investors will be more aggressive in investing in Korea.”
Considering young people’s fear about possible scams involving small rental housing, Lyou anticipated a growth in demand among single- or two-person households for credible rental contracts for convenient homes.
He added that HanmiGlobal AMC is in talks with a global company having a track record in multifamily investing, to form a joint venture for a new type of investment in rental housing. Multifamily investing refers to the act of purchasing a property with multiple units that can be rented out to multiple tenants.
An illustration of Cheongna SpoWorld in Incheon / Courtesy of HanmiGlobal
REITs management
HanmiGlobal AMC was founded in January 2022, a month after the government licensed it to manage real estate investment trusts (REITs).
Seven months later, the company got approval for its first REIT called “Star Collection,” despite the COVID-19 pandemic and rising interest rates making it difficult to raise money.
With the Star Collection having 29.1 billion won ($19.9 million) in assets under management (AUM), the company acquired Incheon’s Cheongna SpoWorld consisting of three buildings and has profited off the rental payments from tenants, including LG Electronics Best Shop’s Cheongna branch, a Starbucks Drive Thru store and an indoor golf range.
In July 2023, Lyou joined HanmiGlobal AMC, after three decades as an asset manager and working for major domestic securities firms. He was appointed CEO in January last year.
“As we have continued establishing private equity funds, our company’s accumulative AUM surpassed 100 billion won during the first half of 2024,” the 58-year-old said. “In collaboration with a renowned foreign real estate and infrastructure management company, we also played a role as a domestic manager of an offshore fund.”
Plans for future
When HanmiGlobal AMC was founded in 2022, the company aimed to increase its AUM to 2 trillion won by 2027 and become a top-tier manager of real estate-related assets.
As of the end of last year, its AUM was 80.9 billion won.
“To achieve our goals, we will constantly hire talented people in the real estate market,” Lyou said. “We have always shared business objectives with our employees.”
The asset management firm pursues collaborations with its parent company, which holds the largest share in the domestic construction project management market and the eighth-largest share in the global market.
“Based on the capabilities of HanmiGlobal in project management, we will gain trust by providing competitive products in asset management to our customers, through the integration of real estate and finance,” Lyou said.
“Building on this trust, we will establish a blind-pool fund for development financing, positioning ourselves as a subsidiary that provides financial solutions to our parent firm and affiliates.”
