Mastern Premier REITs, "Aiming for 6% Annual Dividend Yield through Office Investment in France"

Offering price set at 5,000 KRW per share, total planned offering amount 110 billion KRW
Demand forecast from July 16 to 17, public subscription from July 22 to 24
Scheduled to be listed on the KOSPI market in early August

Daehyung Kim, CEO of Maston Investment Management

[Asia Economy Reporter Eunmo Koo] “Mastern Investment Management will grow Mastern Premier REITs into the most prestigious and intrinsically valuable REIT in Korea with a market capitalization in the trillion-won range within the next 3 to 4 years through continuous inclusion of overseas assets with excellent stability and growth potential.”

On the 15th, Kim Dae-hyung, CEO of Mastern Investment Management, stated this vision and ambition for Mastern Premier No.1 Trust Management Real Estate Investment Company (Mastern Premier No.1) at an initial public offering (IPO) press conference held in Yeouido, Seoul. Mastern Premier No.1 is a REIT (Real Estate Investment Trust) based on overseas real estate assets and has officially entered the public offering process following the effectiveness of its securities registration statement.

Mastern Premier No.1 is a fund-of-funds REIT that uses the Crystal Parc office located in Neuilly-sur-Seine, the office district of Paris, France, as its underlying asset. A fund-of-funds REIT invests not directly in real estate assets but in securities of other REITs or real estate funds that own the properties.

The Crystal Parc office, included as the underlying asset of Mastern Premier No.1, is an office building with a total floor area of 44,866 m² spanning from two basement levels to seven above-ground floors. The investment is managed jointly by La Francaise, a French real estate public fund asset management company, and Mastern Investment Management through the ‘Mastern Europe No.9 Fund.’ The shares offered to investors through this KOSPI market listing represent 24.08% of the total fund shares, equivalent to approximately 110 billion KRW.

Major tenants include PricewaterhouseCoopers (PwC) France, one of the Big Four accounting firms, and global cosmetics company Est?e Lauder, both under lease contracts until 2028; computer consultancy Adelius, leased until 2030; and fragrance raw material specialist IFF, among others, resulting in an average remaining lease term of 7.9 years.

A view of Crystal Parc in Paris, France, included as the underlying asset of Maston Premier No.1.

The expected average annual dividend yield of Mastern Premier No.1 is in the mid-6% range, with total returns including capital gains expected to exceed 8%. For public offering subscribers only, the first dividend for September is planned to be paid at an annualized rate of 23.76% (99 KRW per share, based on an offering price of 5,000 KRW, equivalent to 2%).

To secure liquidity for stable dividends, approximately 15% of total assets will be allocated to liquid assets. Kim Jong-min, head of overseas investment at Mastern Investment Management, explained, “In overseas investments, matching the currency hedge period with the investment period is crucial. If the periods do not align, fluctuations in exchange rates can trigger additional capital calls, which may necessitate further capital increases or cause changes in returns due to contract renewals.”

The company stated that although Mastern Europe No.9, which Mastern Premier No.1 will acquire, has matched investment periods and currency hedge contract maturities to minimize exchange rate risk, liquid assets are included as a precaution in case asset sales are delayed and hedge contracts need renewal. Of the 15% liquid assets, 10% will be invested predominantly in global listed REITs rated BBB or higher on the New York Stock Exchange to pursue income from dividends and value appreciation, while the remaining 5% will be held in deposit form to maintain liquidity and stable management.

Mastern Premier No.1 plans to selectively invest in global prime real estate through additional capital increases, acquiring 1 to 2 additional assets annually until 2024, growing into a REIT with total assets around 1 trillion KRW. Letters of intent (LOIs) have been submitted for office acquisition candidates currently located in Luxembourg, London, UK, and Tokyo, Japan.

CEO Kim Dae-hyung said, “Starting with the Crystal Parc office, Mastern Premier No.1 plans to acquire additional real estate in key advanced country locations after listing. It will be a REIT that provides general investors with opportunities to invest in high-quality overseas real estate.”

The number of shares offered in this listing by Mastern Premier No.1 is 22 million shares, with a fixed offering price of 5,000 KRW per share, targeting a total offering amount of 110 billion KRW. Demand forecasting for domestic and foreign institutional investors will be conducted over two days from the 16th to the 17th, followed by public subscription from the 22nd to the 24th. The listing is scheduled for early next month on the KOSPI market. Samsung Securities is the lead underwriter.

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