The Nation's First Rental Housing REIT Launches... "Stable Investment Returns Despite Economic Shocks"

Aegis Asset Management Plans Listing of REIT Product Investing in Bupyeong The Sharp
Secured at About 70% of Current Market Price... Possibility of Principal Protection↑
Achieving Target Yield Also Easy... Over 8.9% Profit Even at Current Market Price

Jung Hyun Kim, Head of Project Finance Investment Division at Aegis Asset Management

[Asia Economy Reporter Minwoo Lee] Aegis Asset Management is set to list the first-ever REITs (Real Estate Investment Trusts) based on publicly supported private rental housing on the Korea Exchange. The asset has already been secured at a relatively low price, making the principal recovery highly likely even amid economic shocks, and it has surpassed the target investment return based on nearby market prices, indicating a bright outlook.

On the 26th, Aegis Asset Management held a briefing at the Conrad Hotel in Yeouido, Seoul, to announce the listing of Aegis Residence Trust Management Real Estate Investment Company (hereinafter Aegis Residence REITs) and its future strategy.

The investment target of Aegis Residence REITs is the publicly supported private rental housing project. Kim Jeonghyun, head of the Project Finance Investment Division at Aegis Asset Management, explained, "This is the first REIT composed of private-sector public rental housing," adding, "It is a product that aligns not only with stable rental income and capital gains upon sale but also with the social value of housing stability."

Aegis Residence REITs will raise a total of 89.5 billion KRW through this public offering and invest in 'Bupyeong The Sharp,' developed as part of the residential environment improvement project in Sipjeong 2 District, Bupyeong-gu, Incheon. The investment will be made indirectly by reinvesting in equity securities of the Aegis 151 Fund, which purchased 3,578 units of private rental housing in Bupyeong The Sharp.

Bupyeong The Sharp Rendering

Bupyeong The Sharp, a large apartment complex with a total of 5,678 units, is being constructed by POSCO Construction and is scheduled for completion in April 2022. The project is managed by Incheon Urban Corporation and consists of 28 buildings ranging from two basement floors to 49 above-ground floors. It is located near Dongam Station, an express stop on Subway Line 1, and will be connected to Bupyeong Station, near the planned GTX-B line opening in 2027.

Kim highlighted the high principal preservation of Aegis Residence REITs as a key advantage. He stated, "Investing in Aegis Residence REITs is equivalent to purchasing Bupyeong The Sharp at 9.85 million KRW per 3.3㎡," adding, "Considering the current estimated market price is already 14.5 million KRW per 3.3㎡, the investment principal can be recovered even if the price drops by up to 32%."

The outlook for achieving investment returns is also positive. At the planned asset sale in late June 2030, factoring in the appraisal value from October last year of 13.09 million KRW per 3.3㎡ and an average annual housing price increase of 0.5%, the sale price is expected to be 13.79 million KRW per 3.3㎡, projecting an IRR-based return of 8.9% including capital gains. Kim emphasized, "Considering the current market price is already in the 14 million KRW range per 3.3㎡, the target return is achievable," and added, "Unlike existing commercial buildings, offices, and shopping malls, the physical asset being apartments allows individual investors to easily verify market price information, which is another advantage."

The lead underwriter for the listing is Samsung Securities, with DB Financial Investment and Yuanta Securities as co-underwriters. The total number of shares offered is 17.9 million, with a public offering price of 5,000 KRW per share. Demand forecasting for institutional investors will be conducted from the 30th of this month to the 1st of next month, with public subscription for general and institutional investors starting on the 6th and 7th of next month, respectively, and continuing until the 8th. Institutional investors can subscribe through Samsung Securities and DB Financial Investment, while general investors can subscribe through Samsung Securities, DB Financial Investment, and Yuanta Securities. The listing is expected as early as the end of next month.

This content was produced with the assistance of AI translation services.