"JR REITs to be Listed Next Month, Stable Rental Income with Tax Benefits as a Bonus"

[Asia Economy Reporter Ji-hwan Park] JR Global Entrusted Management Real Estate Investment Company (JR Global REIT), attracting attention as the first public overseas real estate REIT in Korea, is scheduled to be listed next month. Stable leases, a dividend yield of around 8%, and tax benefits on dividends within an investment limit of 50 million KRW are highlighted as key investment points.

JR Global REIT was the first to obtain approval for overseas public REIT operations from the Ministry of Land, Infrastructure and Transport in February this year. The investment asset is the office building "Finance Tower Complex" located in the Pentagon area of the central business district in Brussels, Belgium. This office houses major government ministries such as the Belgian Ministry of Finance and Ministry of Welfare. The lease runs until December 2034, and early termination is not allowed during the remaining lease period. While office supply in the area is limited, demand for leases is high, making future asset value appreciation expected.

The investment method involves investing public funds into private REIT (JaREIT) shares, and the private REIT invests in overseas real estate or securities backed by overseas real estate. Based on the public offering price, the expected average annual dividend yield over seven years is approximately 8.06%, expected to be the highest among REITs scheduled for listing this year.

Meritz Securities, the lead underwriter, emphasized that for each investor, dividend income generated from investments up to 50 million KRW can be subject to a separate tax rate of 9% for three years without being included in comprehensive income tax base. Additionally, half of the shares allocated to general subscription applicants are reserved for small investors with priority allocation, and the remaining 50% are allocated through competitive allocation to enhance accessibility for small individual investors.

A Meritz Securities official stated, "To achieve stable KRW-based returns against currency risk, JaREIT has entered into a currency hedge contract," adding, "Through a strategic three-year maturity currency swap contract, more favorable conditions for currency swaps can be secured once the COVID-19 situation stabilizes."

The total number of shares to be offered publicly is 97 million, with a public offering price of 5,000 KRW per share. Including private (Pre-IPO) shares, the market capitalization reaches 828 billion KRW. Subscription will take place from the 22nd to the 24th, aiming for listing in early next month.

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