K-REITs & Infrastructure Monthly — Vol.005 (2026-10)

In October the REIT & Infra market returned -2.40% on a market-cap weighted average, and of the six sectors only Retail (1.45%) was positive

The five sectors other than Retail were also negative in September, and in October their returns ranged more widely, from -1.35% (Infrastructure) to -11.96% (Diversified, a single name), than the -2.06% to -2.78% of September

Retail has been positive for four straight months from July to October, but its return slowed from 7.20% in August to 3.42% in September and 1.45% in October

The three sectors with the lowest returns in October also have 12-month cumulative returns below -20%: Industrial at -28.6%, Residential at -21.4% and Diversified at -20.2%

Retail

Only Lotte REIT of the four names rose, by 5.07% (70.8% of the sector), while E KOCREF CR-REIT fell 10.49% (12.1% of the sector)

Infrastructure

Of the two names, Macquarie Korea Infrastructure Fund fell 1.74% (79.1% of the sector) and KB Balhae Infrastructure Fund rose 0.10% (20.9% of the sector)

Office

The sector returned -2.62% in October; Hanwha REIT fell 5.23% (20.2% of the sector), IGIS Value Plus REIT fell 18.08% (5.3% of the sector), KB Star REIT fell 11.69% (5.2% of the sector) and SK REIT rose 0.38% (33.3% of the sector, the largest)

Industrial

The sector returned -8.74% in October with all five names falling; Koramco Life Infra REIT fell 13.93% (28.2% of the sector), ESR Kendall Square REIT fell 3.55% (53.8% of the sector, the largest) and Mirae Asset Global REIT fell 47.21% (3.8% of the sector)

Diversified (the single name NH All One REIT)

The sector returned -11.96% in October, lower than the monthly return of any of the previous 12 months

Residential (the single name IGIS Residence REIT)

The sector returned -7.96% in October, lower than the monthly return of all but one of the previous 12 months, -14.16%

The Bank of Korea Monetary Policy Board held the base rate at 3.00% on 22 October, with all 7 members in favour

The 27 August increase passed 6 to 1, with 1 vote against, while this hold had no votes against

With uncertainty over the Middle East situation and the monetary and fiscal policies of major economies having risen, the Board judged that it needs to review the effects of the July and August increases and developments in domestic and external risk factors

The Board expects growth this year and next to substantially exceed its August forecasts (3.3% this year, 2.9% next year)

Its judgement is that exports and investment will keep growing strongly on the back of the semiconductor upswing and that consumption will recover gradually as income conditions improve

The Board expects next year's consumer-price and core inflation (excluding food and energy) to exceed its August forecasts (consumer prices 2.3%, core 2.5%)

This year's inflation is broadly in line with the August forecasts (consumer prices 2.7%, core 2.5%)

On 30 October the 3-year KTB yield was 3.71%, down 0.30pp from 30 September, and the 10-year yield was 4.01%, down 0.40pp

The spread between the 10-year and 3-year yields narrowed by 0.10pp from 0.40pp on 30 September

At its first meeting after the 0.25pp increase in September, on 28 October, the Federal Open Market Committee (FOMC) of the US Federal Reserve held the target range for the federal funds rate at 3.75-4.00% on a 10-2 vote, with both dissenters favouring a 0.25pp increase

In the statement of the same day, the assessment of economic activity was upgraded from expanding at a solid pace in the September statement to expanding at a strong pace

The sentence in the September statement saying the increase would support a timelier return of inflation to the 2 percent goal was deleted, and a sentence saying that the accumulation of more information will help determine the appropriate policy stance was added

From 30 September to 29 October, the 2-year Treasury yield fell 0.27pp from 4.88% to 4.61% and the 10-year yield fell 0.31pp from 5.29% to 4.98%

As of the latest published month (2026-09).

The amendment to the Enforcement Decree of the Real Estate Investment Companies Act, promulgated and in force on 13 October, expanded the range of securities REITs may acquire and the limits on acquiring them

Securities equivalent to asset-backed securities were added to the securities REITs may acquire, and may be acquired above 5% of total assets

The issuer is a party designated by public notice of the Minister of Land, Infrastructure and Transport

Real-estate-secured monetary claims make up at least 70% of the value of the securitised assets

No asset securitisation plan under the Asset-Backed Securitization Act is registered for the issue

REITs may acquire shares of companies operating elderly care homes (yangro facilities) under outsourcing above 10% of the issued shares, where previously only companies operating senior welfare housing under outsourcing qualified