CBRE Korea, “Domestic Construction and Real Estate Corporate Loans Reach KRW 361 Trillion, Lenders to Expand Selectively as Market Liquidity Gradually Improves”

December 11, 2025 (Seoul) – CBRE Korea, the world's largest commercial real estate services company, announced in its “2025 Korea Lender Survey” report that, including commercial real estate, the combined outstanding corporate loan volume to the domestic construction and real estate sectors reached an all-time high of KRW 361 trillion as of 2024, and that the 2026 market is shifting toward a strategy of “selective expansion” combined with “parallel risk management.”

CBRE Korea, the world's largest commercial real estate services company, announced in its “2025 Korea Lender Survey” that outstanding domestic commercial real estate loans reached KRW 361 trillion as of 2024, marking an all-time high. The report also finds that the 2026 market is shifting toward a strategy of “selective expansion” combined with “parallel risk management.”

The expansion in loan volume extends a trend in which the market has more than doubled over the past decade, driven by a combination of prolonged low interest rates, rising asset values and greater participation from corporate borrowers. At the same time, structural pressures such as liquidity risk and concentration in certain asset types have accumulated, underscoring the need for more sophisticated risk management across the market.

The survey covered 44 major domestic financial institutions, including commercial banks, insurance companies, asset management firms, securities companies and savings banks. Among all respondents, 62% stated that they plan to increase their lending activity in 2026 compared with this year. This indicates a growing move to seek lending opportunities more flexibly, including selective expansion of project finance (PF) exposure to prime assets. In particular as expectations for policy rate cuts are priced in, lenders are focusing on strategies that minimize exposure to high-risk assets while selectively allocating capital to assets with stable cash flows.

Lenders maintain a cautious outlook on the base rate. A total of 84% expect the base rate to reach around 2.00–2.25% by the first half of 2026. Although the Bank of Korea’s recent decisions to keep rates on hold have created uncertainty around the pace of rate cuts, most lenders anticipate that effective rate reductions in the first half of next year will gradually improve market liquidity.

The survey also shows a clear concentration of lending toward specific asset types. On the direct lending side, 75% of respondents cited “stabilized offices” as their top preference, followed by “ambient-temperature logistics centers” at 59%. Both asset classes are evaluated as core assets with proven cash flows, supported by low vacancy rates and stable occupier demand. Data centers and co-living assets each recorded preference levels above 20%, highlighting their potential as strategic growth sectors.

Credit standards for new loans are also tightening. For new originations, appropriate loan-to-value (LTV) ratios were concentrated in the 51–70% range, with only a very small share of responses indicating a willingness to lend above 70%. Even among non-bank lenders such as capital companies and savings banks, only a minority indicated they would consider LTV levels of 70% or higher. The most common response for the debt service coverage ratio (DSCR) was in the 1.3–1.4x range, reflecting a higher required cash flow safety margin compared with the 1.1–1.2x levels often seen in the past.

In the project finance (PF) market, restructuring and risk transmission are occurring simultaneously. Delinquency rates on bridge loans and land-backed loans have risen above 17% and 30%, respectively, indicating that distress in the market is deepening. The delinquency rate for term PF loans has also climbed sharply, from 0.96% in 2023 to 2.60% in 2025, indicating that stress is spreading into the project execution phase. In response, lenders are tightening standards, including requiring equity contributions of around 30% for logistics development PF deals. At the same time, data centers have emerged as a key future asset class, with more than 50% of respondents expressing a willingness to provide PF loans to this sector, placing it alongside offices and logistics in terms of lender preference.

Claire Choi, Senior Director, Head of Research at CBRE Korea, commented, “2026 marks the beginning of a major strategic shift in commercial real estate lending. We are seeing selective expansion centered on prime assets, which is expected to have a positive impact on market liquidity, while lenders are also actively exploring financing opportunities in future-oriented sectors such as data centers beyond traditional asset classes.” She added, “Going forward, the lending market will be reshaped around three key pillars: rigorous risk control, sustainable profitability and the stability of underlying cash flows.”