Mastern Premier Reit 1, a listed company that invested in French office buildings and an Amazon logistics center, has decided to sell major assets at home and abroad. It is a self-rescue measure to overcome an imminent liquidity crisis. Mastern Premier Reit 1's share price has plunged as the global real estate market slumped and dividends were suspended.
As of the 29th, according to the financial investment industry, Mastern Investment Management, the asset management company (AMC) of Mastern Premier Reit 1, recently sent a letter containing this to shareholders.
The company plans to sell overseas asset holdings including the Amazon logistics center in France and the Crystal Park office building.
In the case of the Amazon logistics center, Mastern Premier Reit 1 holds 100% equity, and Amazon leases the entire area. Although eight years remain on the lease, Mastern Investment Management is targeting a sale in the second half of this year to reduce the burden of foreign exchange risk settlement and loan maturities.
At the time of listing, the company promoted the Amazon logistics center as a core asset. But as the French real estate market entered a slump, the asset value fell sharply. In addition, with a cash retention obligation arising from the local collateralized loan, dividends are currently not being paid normally. The local loan matures in April next year.
For the Crystal Park office building, Mastern Premier Reit 1 holds about 13% equity in the form of beneficiary certificates. Due to priority repayment of local principal and interest and the burden of currency-hedging expenses, dividends have been suspended since last year.
Mastern Premier Reit 1 is also pushing to sell the domestic Hang-dong logistics center in Incheon. The asset is a Coupang cold storage warehouse, in which Mastern Premier Reit 1 holds about 26% equity. At this logistics center as well, rents were adjusted, borrowing rates rose, and dividends decreased.
In the industry, the view is that the manager decided on asset sales to maintain the listing and respond to shareholder backlash.
Mastern Investment Management said it will concentrate its capabilities and stake everything on normalizing assets and maximizing principal recovery through sales, adding that it is continuing to defer collection of asset management fees to ease the burden on shareholders and will do so until asset sales become visible.
The market is watching whether the asset sales will proceed normally. A senior official in the REITs industry said, "If the sale of key assets proceeds as scheduled, cash can be secured and liquidity risks could be somewhat eased," but added, "Given the weakened investment sentiment in the European real estate market, it remains to be seen whether they can sell at a fair price."