This article was displayed on the ChosunBiz MoneyMove (MM) website at 11:23 a.m. on May 31, 2026.
The delisting of REIT operator JK Riverstone REIT (formerly STAR SM REIT) has been finalized. It comes about a year after the delisting decision in April last year over embezzlement allegations involving former management. The closing auction is scheduled to run from the 2nd to the 11th of next month.
Typically, once a closing auction for delisting begins, the share price plunges, making it hard for existing investors to avoid losses. However, JK Riverstone REIT is understood to hold assets that exceed its market capitalization, given the nature of a REIT operator. Accordingly, some analysis says that if liquidation takes place, investors could even expect investment revenue.
According to the investment banking (IB) industry on the 31st, the Seoul Southern District Court on the 26th dismissed JK Riverstone REIT's request for an injunction to suspend the effect of the delisting decision against the Korea Exchange (KRX). As a result, the exchange finalized the delisting of JK Riverstone REIT.
JK Riverstone REIT triggered grounds for delisting in February last year when disclosures on embezzlement and breach of trust by former management were issued. The exchange then decided to delist the company after a review by the Corporate Review Committee, but the company immediately sought a court injunction to suspend the effect of the delisting decision, leading to a legal dispute.
The company argues there was a procedural flaw in that the exchange decided to delist without granting a one-year improvement period. It also argued that because the embezzlement allegations against former management were dropped in November last year, if an improvement period had been granted, the decision to maintain the listing could have been possible by reflecting the investigation results.
However, the court judged that even if an improvement period had been granted, the likelihood of meeting listing eligibility was low considering business continuity and financial soundness. About a year, similar to a normal improvement period, has passed since the delisting decision, but management improvements were not properly made, so not granting an improvement period cannot be seen as a procedural defect in the delisting process.
With the delisting confirmed by the court's decision, once the closing auction begins, a flood of shares from small investors is expected to hit the market.
Some, however, say it may be better not to hastily cut losses. Given that most assets of a REIT operator are real estate assets, choosing liquidation instead of continuing operations could actually minimize investor losses.
According to JK Riverstone REIT's quarterly report, as of the first quarter total assets are about 63 billion won, with property, plant and equipment at about 56 billion won. This is because, by nature, most of a REIT operator's assets are real estate. Liabilities total about 33 billion won, but excluding deferred tax liabilities, which are accounting liabilities, the liabilities the company must repay fall to about 30 billion won. Considering only real estate assets, the rough liquidation value is estimated at around 26 billion won.
JK Riverstone REIT's shares, which are halted, are at 2,035 won, with a market capitalization of about 15.9 billion won. By contrast, book value per share (BPS), which reflects per-share liquidation value, stands at around 3,900 won. That means a liquidation value about double the current share price.
While only the delisting has been decided and the REIT business license remains intact, there is a possibility the REIT business could continue in an unlisted state. However, JK Riverstone REIT has posted losses for two consecutive years since 2024 and its profitability has deteriorated significantly, leaving no capacity for dividends. Therefore, industry officials say there is little practical benefit to continuing the business.
An official in the capital markets industry said, "Judging by the liquidation value, choosing liquidation rather than continuing operations after delisting appears reasonable," adding, "It is a strong option to minimize investor losses from delisting."
However, the company is said not to have drawn up specific plans yet on whether to continue operations or to liquidate after delisting.
An industry official said, "When the closing auction starts, some investors are expected to accumulate equity with liquidation in mind," adding, "However, in the processes of delisting, the closing auction, and liquidation, it is impossible to know what variables might arise. If unexpected risks occur, there could be heavy losses." Another official also warned, "It is unclear whether the value of property, plant and equipment stated in the quarterly report is accurate. One should not be certain that the liquidation value will be higher."