It has been reported that over 230 billion won of general investors' funds have entered real estate funds based on the Homeplus site. These funds generate revenue from the 'rent' received from Homeplus and the 'sale proceeds' from the future sale of the store, but both profits are currently uncertain as the company has entered into corporate rehabilitation proceedings.
Homeplus has stated that it will prioritize repaying the rent, but investors' concerns persist. There are too many creditors, making it unclear whether they will be able to collect all the rent from Homeplus. The sale of the stores is also still uncertain.
Assets related to the Homeplus site have also been found to exceed 100 billion won in real estate fund products that are part of listed securities. The good news is that unlike real estate funds, the securities hold multiple assets beyond Homeplus stores, making the risks associated with rehabilitation relatively lower.
According to materials submitted by the Financial Supervisory Service on the 17th to the office of lawmaker Kim Hyun-jung, a member of the National Assembly's Political Affairs Committee, the real estate funds based on the Homeplus site include the 'Yugyeong Public Real Estate Fund No. 3 (Yugyeong 3)' managed by Yugyeong PSG Asset Management and the 'IGIS Core Retail Real Estate Fund No. 126 (IGIS 126)' managed by IGIS Asset Management. The amount raised by the two funds from general investors is 237 billion won, with Yugyeong 3 raising 170.3 billion won and IGIS 126 raising 66.7 billion won.
The structure of the two products is the same. They combine money raised from general investors through public offerings with loans from commercial banks to purchase stores from Homeplus, and then lease them back to Homeplus via a sales-and-leaseback method. Yugyeong 3 includes stores in Ulsan, Gumi, and Siheung, while IGIS 126 encompasses the Hyunja store in Jeonju.
The rent generated from this will be distributed quarterly to investors by Yugyeong 3 and semi-annually by IGIS 126. They also aim to realize capital gains from selling the Homeplus stores before the fund matures. Both Yugyeong 3, established in 2020, and IGIS 126, established in 2017, have the same maturity date in 2028.
The two funds appear to face some inevitable losses immediately. On the 7th, the Hyunja store in Jeonju was supposed to pay its rent, but Homeplus failed to meet this obligation. Signs of a rent payment default due to rehabilitation proceedings are starting to emerge.
Kim Byung-joo, chairman of the private equity fund MBK Partners and largest shareholder of Homeplus, has indicated that he will attempt to resolve the situation by contributing his personal funds, but the rent will likely be excluded from this support. The day before, MBK Partners noted in a news release that it would provide payment support to small business partners.
The rent for the Hyunja store in Jeonju is estimated to exceed 10 billion won. The rent for the Hyunja store was 8.722 billion won when the fund was established in 2016, and it has been increasing annually based on the consumer price index (CPI) since the following year. The rents for the stores in Ulsan, Gumi, and Siheung were set at 15.2 billion won in 2020 when the fund was established, and it has increased by 2.0% every year, reaching approximately 16.4 billion won as of last year.
However, it is also a tricky situation to sell the stores. The investment appeal of the buildings lies in regular cash flows like rent, but currently, Homeplus stores do not provide this.
Potential investors expressing interest in acquiring are currently suggesting significantly lower prices. Recently, Yugyeong PSG Asset Management attempted to sell the stores in Ulsan, Gumi, and Siheung, but the highest bid was only 260 billion won from FL Asset Management, prompting a decision to abandon the sale. This figure is about 20% lower than the amount originally raised by Yugyeong 3 through public offerings and loans (321.4 billion won), making it impossible to recover the principal.
The revenue rates for both funds are also at rock bottom. Recently, Yugyeong 3's profit and loss rate was minus (-) 0.61%, while IGIS 126's was 0.35%.
The only public REIT based on the Homeplus site is the 'Shinhan Seobu T&D REIT' managed by Shinhan REITs Management, with a raised amount of 134.9 billion won. The advantage over real estate funds is that this REIT invests not only in the Homeplus site but also in various properties such as the Grand Mercure Yongsan, Nine Tree Hotel Dongdaemun, and G Tower in Gwanghwamun.
The Shinhan Seobu T&D REIT has included Homeplus as a tenant in the basement of the Incheon Square One building. So far, it has successfully collected all rent due until August 22. If issues arise with unpaid rent, the largest shareholder and ground-floor tenant of Incheon Square One, Seobu T&D, has agreed to take on the responsibility for the Homeplus area. This is to ensure that dividends are paid to investors as expected.
A representative from Shinhan REITs Management said, 'Homeplus accounts for about 18% of the operating revenue of Incheon Square One,' and that 'the rent is paid every August, allowing us to gauge the situation around April or May.' However, the revenue rate for this REIT is poor, with a recent one-month revenue rate of -12.46%.