Korea Post picks Capstone, IGIS for KRW 500 billion property debt mandate
Korea Post has selected Capstone Asset Management and IGIS Asset Management as preferred bidders for a KRW 500 billion ($368 million) domestic real estate loan strategy. The mandate marks the state-run postal agency's first domestic property debt programme since 2023, permitting development lending
Korea Post has selected Capstone Asset Management and IGIS Asset Management as preferred bidders to oversee a KRW 500 billion ($368 million) domestic real estate loan strategy, cautiously reopening property development finance after a three-year pause. The state-run postal agency's savings arm named the two Seoul-based managers on 26 August after launching the tender in July. Korea Post had planned to appoint two or three managers but has not disclosed how the capital will be divided between Capstone and IGIS.
"Final selection is scheduled following on-site due diligence and an investment review committee," Korea Post said. "We extend our sincere gratitude to the asset management companies and all stakeholders who applied." The programme is Korea Post Savings' first domestic property debt mandate since 2023, when it committed KRW 400 billion to a single manager while prohibiting land-backed, bridge and other development-related loans, including project finance. The new mandate permits selected development lending but continues to exclude land-backed and bridge financing.
The blind-pool funds will focus on senior secured loans against Korean offices, logistics facilities and other real estate, with such lending required to account for at least half of invested capital. Korea Post is targeting a net internal rate of return of at least 5.5 per cent, according to the agency's July tender notice. Each vehicle must raise at least KRW 150 billion and will have an investment period of up to three years and an initial term of no more than eight years.
Portfolio-level loan-to-value and loan-to-cost ratios are capped at 70 per cent, while individual completed-asset loans may reach 75 per cent LTV and development loans 80 per cent LTC. Individual investments are limited to 40 per cent of a fund's commitments, while each manager and its investment team must contribute at least 1 per cent of the vehicle. The managers must also give Korea Post priority access to co-investments and additional opportunities involving domestic assets.
The partial reopening of development finance marks a shift from 2023, when high interest rates and fallout from the Legoland-linked credit crisis led Korean institutions to cut project financing exposure. The new guidelines allow lending to qualifying projects after construction begins, while preserving safeguards against riskier land and bridge stages, Yonhap Infomax reported. The debt programme follows Korea Post's commitment of up to KRW 500 billion to a domestic core property strategy managed by Mirae Asset Global Investments.
Korea Post is seeking higher returns from real estate and other alternative assets as losses at its traditional mail and parcel operation mount. The agency manages KRW 157 trillion in savings and insurance assets, while its postal business lost KRW 311.6 billion in 2025 and was forecast to post a KRW 340 billion deficit this year, according to Reuters.
