The Korea REITs Association noted that it held a real estate investment meeting on the afternoon of the 13th in the association's conference room located in Yeouido, Yeongdeungpo-gu, Seoul.
A total of three REITs, Shinhan Global Active REIT, JR Global REIT, and E KOCREF participated in the meeting. Experts related to REITs, including media representatives, securities analysts, and institutional and professional investors attended the meeting.
Jung Byeong-yoon, chairman of the Korea REITs Association, emphasized the direction of development for the REITs industry in his opening remarks. He said, "At the end of last year, the asset size of REITs surpassed 100 trillion won, establishing it as an important pillar of the economy; however, there are still challenges to address," emphasizing the need for simplification of the paid-in capital increase process, expansion of mergers, and relaxation of the limit on individual stock ownership for the large-scale growth and liquidity of REITs.
On this day, the Shinhan Global Active REIT side revealed plans to undertake a rebalancing process through asset sales. They plan to sell approximately 30% of their holdings to repay high-interest borrowing funds (8.5%) and subsequently will establish a limit loan for settlement of the foreign exchange hedge. The limit loan is expected to be around 5% early stage, which is about 3% lower than the existing borrowing fund interest rate, and emphasized plans for additional rebalancing to promote increased dividend income and asset value considering improvements in the U.S. real estate market environment.
Next, JR Global REIT explained the results of refinancing of collateral loans on the Brussels Finance Tower and the resulting changes in dividends, as well as future operational plans. In particular, for the Belgian assets, they highlighted that stabilization has begun with the commencement of environmental improvement works for the upper floors, while for the Manhattan assets, securing additional tenants has started. They also noted that the office market is witnessing a recovery trend, with a rapid decrease in vacancy rates and an increase in rental prices centered around Midtown Manhattan.
Additionally, E KOCREF announced a plan to pay annual dividends of 7% based on a public offering price of 5,000 won as part of a strategy to bolster stock prices and enhance shareholder value. They also mentioned the possibility of increasing dividends when interest rates fall and discussed applying a variable interest rate to collateral loans. The company aims to minimize shareholder burden and improve dividend rates and plans to pursue a growth strategy using cash and loan leverage instead of a paid-in capital increase.
The Korea REITs Association and the industry plan to do their best to enhance trust among investors by working to keep pace with trends that increase the potential for development through the introduction of project REITs and institutional improvements. Project REITs will start from building properties at the initial stage of development and will be responsible for operation. They will be subject to a registration system rather than a permit system at the development stage, eliminating concerns about project delays and will be exempt from the limit on individual stock ownership (50%), expected to become a new driving force in the sluggish real estate development market.