Daewoo Engineering & Construction (Daewoo E&C) said on Dec. 30 that it received approval to set up an asset management company (AMC) from the Ministry of Land, Infrastructure and Transport on Dec. 26.
Daewoo E&C received preliminary approval to establish “Together Investment Management Co., Ltd.” (tentative name) on Oct. 7, and finally received the main approval on Dec. 26. Together Investment Management is a joint venture set up by four companies -- Daewoo E&C, the Industrial Bank of Korea (IBK), Kyobo Securities, and Happy Together House (HTH), with an initial capital of 7 billion won (US$6 million).
Daewoo E&C plans to create a new business model that combines construction and finance by going into the real estate investment trust (REIT) business. It looks to use the new business as a growth engine. In particular, Daewoo E&C has a competitive edge over other AMCs in terms of financing and stability, the two elements that hold the key to the success of real estate development projects.
Daewoo E&C will also act as a developer by investing directly in development REITs or lease REITs. It aims to transform itself from a simple construction company into a comprehensive developer that can carry out the whole process from site purchases, planning, design, and marketing to construction and post-execution management. The contractor believes that this strategy can diversify its revenue sources by benefiting from development, lease and sales in addition to income from construction.
Daewoo E&C plans to advance not only into the domestic development market but also into overseas development markets and purchase and manage various real estate assets such as commercial facilities and offices.
The first REIT to be operated by Together Investment Management is a complex development project in Star Lake City, Hanoi of Vietnam. Star Lake City is Vietnam's administrative complex city pursued by Daewoo E&C and is scheduled to be completed in 2025. Together Investment Management is planning to promote a public offering REIT project to develop a complex that includes hotels, large offices and apartments in Star Lake City.
“We are committed to becoming the best general developer in Korea with the goal of recording more than 20 REITs under management and four trillion won (US$3.44 billion) in asset management by 2025,” a Daewoo E&C official said