Mirae Asset Global REIT to raise $371 mn for US warehouses

Mirae Asset Global Real Estate Investment Trust Co., a South Korean listed REIT under Mirae Asset Global Investments Co., is set to raise around 450 billion won ($370.4 million) in a rights issue in June to purchase overseas logistics centers. The REIT aims for a market capitalization of more than 1 trillion won ($823 million) by next year through the rights offering and acquisition of real estate assets.

The REIT on April 1 requested the Ministry of Land, Infrastructure and Transport of Korea for approval of its business plan change. The change in the business plan intends to register Mirae Asset Global REIT II as its second subsidiary. The REIT II plans to acquire 11 logistics centers across the US and lease them.

Mirae Asset Global REIT II has secured quality tenants. Of the 11 warehouses, global e-commerce giant Amazon will rent nine properties and sportswear Foot Locker Retail will use one. A boutique with a wide selection of outdoor fashion brands will rent the other, The Korea Economic Daily understood.

The assets are located near urban centers in California and Utah and will facilitate last-mile delivery to the areas where logistics are in high demand.

Mirae Asset Global REIT is expected to maintain more than a 6% annual dividend yield as the average lease term of the 11 warehouses is similar to that of the REIT’s existing assets. 

Mirae Asset Global REIT’s underlying assets include Amazon and FedEx logistics centers in Houston in Texas, Tampa in Florida and Indianapolis in Indiana. The lease has secured stable returns with rental terms of 10 years or longer. 

Mirae Asset Global REIT went public last December and has prepared for the rights offering since then. The 11 logistics centers were under development at the time.

“The right issuance only six months after IPO could seem early, but we’ve planned for the deal since the listing. We’ll expand the size of REIT by purchasing global blue-chip logistics centers with stable tenancy,” a Mirae Asset official said.

The REIT stock closed at 5,950 won on April 5, marking 172.9 billion won in market cap. It is expected to jump to more than 600 billion won via the right offering, joining the top five ranks among the 19 listed REITs in Korea. There are three REITs in Korea that have more than 1 trillion market caps: ESR Kendall Square REIT Co., Lotte REIT Co. and SK REITs.

Mirae Asset Global REIT’s IPO garnered attention from the market, making a record-high competition ratio of subscription as a listed REIT. The bookbuilding for institutional investors and individual investors achieved competition ratios of 1019.58 and 753.4, respectively.

Write to A-Young Yoon at youngmoney@hankyung.com
Jihyun Kim edited this article.