This article was displayed on the ChosunBiz MoneyMove (MM) site at 3:07 p.m. on Oct. 29, 2025.
Shinsegae Group's asset management company (AMC), Shinsegae Property Investment Management, established a corporate restructuring REIT (CR REIT) and purchased unsold dwellings. It had planned to form a listed REIT by securitizing Starfield, but as the schedule was delayed it shifted to supporting affiliated companies.
On the 29th, according to the investment banking industry, S Value CR REIT, established by Shinsegae Property Investment Management, recently signed a contract to acquire 222 unsold dwellings of 'Villive Radice' in Dalseo District, Daegu, for about 122 billion won. The seller is real estate developer Raymond Investment.
S Value CR REIT decided to raise purchase funds through a paid-in capital increase and secured loans. It plans to raise a total of 60 billion won to pay the deposit and part of the balance, and cover the rest with loans.
The paid-in capital amounts are 28 billion won in common stock, 5 billion won in class A preferred stock, and 27 billion won in class B preferred stock. According to the articles of incorporation, the preferential dividend rates are about 8.0% annually for class A preferred stock and about 2.0% annually for class B preferred stock.
Villive Radice began sales at the end of 2021. However, as of the end of last year the sales rate was reportedly only 14.1%. In response, Shinsegae Engineering & Construction provided credit support for the project financing (PF) initiated by the developer to help raise the sales rate.
However, even after completion in midyear this year it failed to sell out, and ultimately Shinsegae Property Investment Management helped by acquiring the unsold units through the CR REIT.
Shinsegae Property Investment Management launched as an AMC after receiving approval from the Ministry of Land, Infrastructure and Transport in Dec. 2023. Shinsegae Property, the group's developer, provided 100% of the capital. Shinsegae Property is 100% owned by Emart.
The initial goal of Shinsegae Property Investment Management was to launch a sponsor REIT. It planned to create a listed REIT backed by core assets of its parent company Shinsegae Property, such as Starfield. The aim was to securitize group assets to create a structure for investing in new businesses.
But as investment sentiment for retail assets weakened, the formation of a REIT containing Starfield was delayed longer than expected. Ultimately Shinsegae Property Investment Management moved to establish a CR REIT that could generate synergies with group companies. Because a REIT AMC must have investment and management results within three years of approval and the government's tax benefits are ending this year, it accelerated asset purchases.
Shinsegae Property is reportedly negotiating with National Pension Service, a preferred shareholder, on a plan to securitize the Starfield Goyang asset. Initially, several options were considered, including an initial public offering (IPO), a share deal through a special purpose company (SPC), and an asset deal (sale of the physical asset), but now converting to a REIT is seen as the practical option. The Hanam store, which initially planned to launch the first REIT, saw its schedule pushed back after a recapitalization.
An industry source said Shinsegae Engineering & Construction's major Daegu business site, Villive Radice, had increased financial burdens as the sales rate fell short despite discounted sales, but thanks to the affiliate it was able to receive outstanding construction payments and reduce liabilities.