The government is set to actively develop and utilize state-owned assets valued at over 1,400 trillion won to increase national wealth and benefit the public. Plans include developing aging public buildings and idle state land into residential and infrastructure projects, while also leveraging private investment and state asset management funds to expand the scope of development.
On August 20, the Ministry of Finance held the 29th State-Owned Asset Policy Review Committee meeting, chaired by Deputy Prime Minister and Minister of Finance Koo Yun-cheol, where the comprehensive plan for state-owned assets for 2027 was approved. As of the end of last year, the value of state-owned assets stood at 1,403 trillion won. The government aims to enhance the value and utility of these assets to generate national wealth and return the benefits to the public.
Starting in 2027, approximately 200 aging public buildings and residences will undergo mixed-use development. Among the 7,547 public buildings, 2,119, or 28.1%, are over 30 years old. The government plans to shift from a development model centered on state asset management funds to one that includes consignment, trust, and private participation.
The government will promote mixed-use development that reflects local demand, incorporating community facilities and social overhead capital (SOC) alongside public buildings. A Ministry of Finance official explained in a pre-briefing that the approach will involve developing facilities needed by local communities. Options such as youth housing and libraries will be considered based on local needs.
Funding will also be expanded beyond traditional methods. The government plans to enhance capital capacity by investing in the Korea Asset Management Corporation (KAMCO) with government-owned equity, separate from existing projects to construct new public buildings using state asset management funds. A Ministry of Finance official stated, "The fund's capacity has limitations in developing all aging public buildings at once, so we aim to broaden development space by utilizing both private and public funds."
The new measures also include long-term private leasing development. Instead of selling state land with good business potential, the government will retain ownership while leasing it long-term for private development using their funds and ideas. The government will allow private entities to generate profits during the development process but will adjust plans for projects that lack public interest or where profits solely benefit the private sector during the project planning phase.
A prime candidate site is the former Seoul Police Agency's cavalry unit in Seongdong-gu, Seoul. The government is considering developing this area through long-term private leasing to create not only youth housing but also office and community facilities. The initially proposed 400 units of youth housing may change during the project planning process, with discussions currently focusing on a mixed-use development plan that includes around 260 units of youth housing.
The government will also accelerate residential supply using idle state land. To sequentially commence construction of 28,000 public housing units for youth and newlywed couples announced in the 1·29 plan starting in 2027, the government will streamline administrative procedures such as project feasibility reviews and design approvals. Approximately 2,000 units of youth dormitories will be supplied in areas like Guro, Seoul, and Sejong, while senior residences will be piloted in Busan.
State-owned assets will also be utilized to enhance industrial competitiveness. The government will support national strategic industries such as artificial intelligence (AI), semiconductors, and renewable energy with reduced usage fees and long-term leasing. Conversely, special provisions for public institutions with sufficient self-funding capabilities will be reviewed through performance evaluations.
The management of the state asset management fund will also be revised. The fund, valued at around 3 trillion won, will increase its stock investment ratio and utilize pension fund pools to supply long-term capital to strategic industries like AI and semiconductors. The government is also pursuing a plan to invest 20 trillion won in government-owned equity and non-cash stocks into a Korean-style strategic sovereign wealth fund.
Additionally, the government plans to enact a National Asset Basic Law and establish a unified database for national assets, along with an AI model specialized in managing and developing state-owned assets. From 2026 to 2028, a comprehensive survey of 5.9 million parcels will be conducted, and starting in 2029, annual surveys will replace the current five-year cycle. The penalty rate for unauthorized occupation will also be increased from the current 120% to a maximum of 200%.
Deputy Prime Minister Koo stated, "The assets held by the state should be actively utilized as strategic assets that support future growth and the lives of the people. We will make policy efforts to enhance the value of state-owned assets, create national wealth, and return the results to the public in a virtuous cycle."
* This article has been translated by AI.
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