The listed REIT Koramco The One REIT(417310) managed by Koramco REITs Management and Trust will be liquidated. Koramco considered continuing operations by acquiring new assets with the proceeds from the sale of the Hana Securities Building, but it was said to have determined that securing the expected rate of return would be difficult given the rise in prime office asset prices and interest-rate volatility.
On the 23rd, according to the investment banking (IB) industry, Koramco REITs Management and Trust, the asset management company (AMC) of Koramco The One REIT, said in a letter to shareholders the previous day, "We determined that returning the realized investment performance from this sale to shareholders and successfully wrapping up this investment through liquidation best enhances shareholder value."
Earlier, Koramco The One REIT sold the Hana Securities Building for 811.2 billion won in June. In the main bid, Pebblestone Asset Management offered about 38 million won per pyeong, or around 800 billion won in total, and was selected as the preferred bidder. Hana Securities then exercised its right of first refusal and was confirmed as the final acquirer. Koramco The One REIT ultimately sold the asset at 38.4 million won per 3.3㎡ (pyeong), realizing a capital gain of about 318 billion won compared with the transaction reference price at the time of acquisition in 2020.
Koramco REITs Management and Trust reviewed both reinvesting the sale proceeds from the Hana Securities Building into new assets and returning cash to shareholders. However, with office prices in Seoul's core areas at elevated levels, it determined that achieving the target rate of return would be difficult if new assets were added. Accordingly, it decided to end the REIT's operation and return investment performance to shareholders through liquidation.
In particular, during the review of tax issues, it found that distributing residual assets in a lump sum after dissolving the REIT could trigger a corporate tax burden. As a result, Koramco REITs Management and Trust is seriously considering first distributing the capital gains as a special dividend and then proceeding with the liquidation.
Koramco REITs Management and Trust plans to hold a board meeting in October on the REIT liquidation agenda and to pay a special dividend and convene an extraordinary shareholders meeting in November. After a creditor protection process, it is reviewing a schedule to distribute the residual assets and close the liquidation between the end of this year and January next year. However, this is based on the currently expected procedures and timeline and may change depending on progress, including expense settlements.
The market estimates Koramco The One REIT's liquidation value per share at around 11,000 won. If borrowings are repaid and expenses related to the sale are excluded from the 811.2 billion won proceeds from selling the Hana Securities Building, it is expected that distributable resources to shareholders could be in the mid-to-high 500 billion won range. Based on approximately 47.87 million shares outstanding, a simple calculation puts the per-share amount at around the 11,000 won level.