Shinhan Financial Group said on Tuesday it completed arranging 140 billion won in main project financing for the Gongdeok Station mixed-use development project in Mapo district, Seoul, through the Shinhan PF Normalisation Fund, jointly backed with Korea Asset Management Corp.

The Gongdeok Station mixed-use development project was halted at the bridge-loan stage in 2022 due to factors including a slowdown in the property market and rising construction costs. A prolonged liquidity squeeze then left the project’s outlook uncertain.

Shinhan Financial in September 2023 formed the Shinhan PF Normalisation Fund worth 235 billion won through group-level joint investment with KAMCO. Its entrusted manager, Shinhan Asset Management, oversaw the entire development process, from setting up the PFV to restructuring the project. Key group companies including Shinhan Bank and Shinhan Capital took part in arranging financing and making investments.

The case marks the first normalisation result in which investment by the PF normalisation fund restructured a site at risk of suspension and connected it to main PF.

Shinhan Financial said it plans to build on the case by selectively normalising PF projects at risk of distress to prevent market risk from spreading. It also plans to expand a structure in which funds are reinvested into productive areas such as housing supply focused on end-user demand.

A Shinhan Financial official said the case was meaningful because it reconnected funds tied up over concerns about distress to the real economy area of urban housing supply through a normalisation process. The official said Shinhan Financial would continue to expand a financial ecosystem in which funds circulate in the market, based on refined risk management and structural improvements.