Korean REIT backed by Amazon’s Japan warehouse eyes $280 mn IPO

A South Korean real estate investment trust (REIT) backed by Amazon’s largest logistics center in Japan and an office complex in Seoul is planning to raise 310 billion won ($281 million) in an initial public offering expected to take place as early as March.

The REIT is currently selling some of its shares to institutional investors in a pre-IPO placement, with an aim to list on the Korea Exchange between March and April, according to its IPO lead manager NH Investment & Securities on Feb. 15.

NH Investment also has equity interests in both of the REIT's two underlying assets: the Amazon Odawara fulfillment center and the Young City office complex in Munraedong, western Seoul.

The fulfillment center in the city of Odawara is Amazon's largest warehousing and shipping facility in Japan. NH Investment bought a 50.1% stake in the property for 150 billion won in January 2020 and sold it down through a real estate fund that raised 93.4 billion won. Nuveen Real Estate, a unit of the Teachers Insurance and Annuity Association of America, acquired the remaining 49.9% stake.

The 93.4 billion won equity interest in the Amazon warehouse comprises 30% of the REIT’s portfolio, with the Seoul office complex accounting for the remaining 70%. SK Group’s REIT management firm and NH Investment acquired the office complex, consisting of two 13-story buildings, for around 540 billion won in May 2020.

Initially, both NH Investment and SK D&D Co., a real estate developer, had scheduled the IPO for October of last year, upon receiving approval from the Ministry of Land, Infrastructure and Transport.

It is South Korea’s first multi-asset REIT and will expand its portfolio with the addition of logistics facilities to be developed by SK D&D Co., as well as other types of real estate assets at home and abroad.

The REIT is expected to offer an average dividend yield of around 6.5%. Its management firm, a unit of SK D&D, will disclose details about which new assets it is adding to the REIT in its annual reports.

An NH Investment official said the REIT's expanded portfolio will underpin its growth and the pre-IPO share sale is being carried out smoothly.

Write to Seon-Pyo Hong at rickey@hankyung.com
 

Yeonhee Kim edited this article.