Kookmin Shuts Doors On Scores of Investors

A number of investors who crowded into Kookmin Bank branches to apply for the bank's real estate investment trust fund Tuesday were rebuffed after the funds were sold out.

The real estate investment trust fund was designed for investments in land purchases or real estate development, returning profit to investors. Selling the fund, the first such instrument offered by a domestic bank since last July, Kookmin raked in a total of 158 billion won ($118 million) from six rounds of investments.

The sixth round on Tuesday, which amounted to 25 billion won, was for the construction of an apartment complex in Pusan. The maximum amount of investment was limited to 2.5 billion won per person. Kookmin said it expects to earn double-digit returns on investment in 18 months. More than 2,700 people applied for the real estate investment trust fund, but only 87 people succeeded in subscribing for the funds.

"The expected return will be within the range of 8 percent to 12 percent," said a Kookmin Bank official.

With some types of funds, an investor can exercise an option to take possession of an apartment, which the investor can then sell. The investments are guaranteed secure because the bank manages the funds and developers have to buy apartments if sales fall short..

by Choi Hyeon-chul