SK REIT to raise $266 million via Kospi IPO in second half

SK Inc.’s real estate investment trust (REIT) affiliate plans to raise as much as 300 billion won ($266 million) via an initial public offering on South Korea’s main bourse in the second half of this year.

SK Inc., the investment and holding company of Korea’s third-largest conglomerate SK Group, said on Wednesday its board of directors approved its IPO plan at a Tuesday meeting.

The company aims to raise between 200 billion won and 300 billion won through the initial share sale on the Kospi market. It will start the IPO process in the third quarter with a view to debuting its stock before year-end.

SK REIT’s value is estimated at around 2 trillion won, backed by the SK Seorin Building, the group’s 36-story headquarters that houses affiliates such as SK Inc., SK Innovation Co. and SK E&S Co. The property investment trust vehicle’s other underlying asset is some 100 gas stations of SK Energy across the country.

With money recently raised through pre-IPO fundraising and investment from SK Inc., SK REIT plans to complete the purchase of major property such as the group headquarters building located in downtown Seoul.

QUARTERLY DIVIDEND PAYOUT

Company officials said SK REIT will offer investors a stable investment opportunity as the real estate owned by SK REIT will mostly be leased to SK Group affiliates under long-term contracts.

SK REIT is also considering a quarterly dividend to attract investors. Most listed REITs pay dividends every six months.

SK Group’s listing of its REIT affiliate follows in the footsteps of Lotte REIT.

Korea's leading retailer Lotte Shopping Co. has launched the REIT company backed by department and discount stores as well as outlet malls across the country.

It was listed on the Korea Exchange in 2019. Until now, Lotte Shopping is the only Korean business group that has launched and listed a retail-backed REIT.

Write to Jae-Kwang Ahn at ahnjk@hankyung.com
In-Soo Nam edited this article.