JR AMC eyes Korea's first international REIT IPO in H1

South Korea’s real estate investment firm JR Asset Management (JR AMC) is readying to publicly trade the country’s first offshore real estate investment trust on the local bourse by the first half of the year.

The company said Tuesday it won approval from the Ministry of Land, Infrastructure and Transport to proceed with the initial public offering of the JR Global REIT.

Meritz Securities and KB Securities are the lead underwriters. The investment is expected to generate an 8 percent annual yield, the company said.

JR Global REIT will back the JR REIT Fund 26, which owns a 1.6 trillion won ($1.32 billion) Finance Tower Complex in Brussels that houses the Federal Government of Belgium as its underlying asset.

Finance Tower Complex in Brussels. [Photo by JR Asset Management]

Some have expressed doubt about JR AMC’s IPO schedule. One source in the asset management industry said there is already a backlog of local REITs waiting for their IPO filing reviews and suggested the process could take longer for overseas REITs, which have a more complex structure that needs to be closely scrutinized in terms of consumer protection.

“We’re looking for various ways to broaden investment opportunities for retail investors,” said Kim Kwan-young, chief executive of JR AMC. “We plan to continue our strategic investment by seeking out attractive assets abroad that can be packaged as international REITs.”

JR AMC became the first Korean firm to jump into the offshore REIT business by acquiring the Star Gate building in Tokyo in 2014.

[ㄏ Maeil Business Newspaper & mk.co.kr, All rights reserved]