Lotte REITs Adds Assets Worth 800 Billion KRW Including Lotte Gimpo Logistics Center

Portfolio Diversification Through Logistics Center Inclusion
Asset Size to Increase to 2.3 Trillion KRW Upon Shareholders' Approval
First Domestic Listed REIT to Pursue Logistics Center Inclusion

[Asia Economy Reporter Lim Hye-seon] Lotte Entrusted Management Real Estate Investment Company (Lotte REITs) announced on the 12th that it held a board meeting and decided to incorporate six real estate properties worth a total of 800 billion KRW as assets, including Lotte Department Store Jungdong Branch and Ansan Branch, Lotte Premium Outlet Icheon Branch, Lotte Mart Gyeyang Branch and Chuncheon Branch, and Lotte Global Logistics' Lotte Gimpo Logistics Center.

Lotte REITs, which was listed on the KOSPI market on October 30 last year, is structured to distribute rental income generated from 10 stores, including Lotte Department Store, outlets, and marts, to investors. The anchor investor and responsible tenant of Lotte REITs is Lotte Shopping, which owns 50% of the shares, and asset management is handled by Lotte AMC. The main source of income for the REIT is rental income, and in particular, Lotte REITs can generate stable rental income through a long-term responsible lease contract with its tenant, Lotte Shopping.

Once additional asset incorporation is completed through related permits and approvals, the scale of assets held by Lotte REITs will increase from the current 1.5 trillion KRW to 2.3 trillion KRW. Annual rental income is expected to increase from the current approximately 75 billion KRW to about 110 billion KRW.

Furthermore, most of the Lotte Department Store, Premium Outlet, and Mart being incorporated are located in key metropolitan areas, enabling the generation of even more stable rental income.

In particular, the Lotte Gimpo Logistics Center, which is the core of this asset portfolio diversification, is located in the Gimpo Gochon logistics complex, which is highly preferred by shippers. It is evaluated to have abundant investment attractiveness as it is expected to see an increase in real estate value and stable rental income in the future. Lotte REITs plans to secure the right of first offer (ROFO) through an agreement with Lotte Global Logistics, allowing it to have priority in purchasing logistics centers currently owned or under construction by Lotte Global Logistics. Going forward, Lotte REITs intends to continue efforts to incorporate high-quality logistics assets favored by investors in the untact era to ensure sustainable growth.

A Lotte REITs official commented on the board meeting results focused on additional asset incorporation, saying, "We expect not only quantitative growth through the incorporation of six high-quality assets but also qualitative growth in the composition of the investment portfolio," and added, "We will continue to strive to enhance asset competitiveness and maximize shareholder value as the largest listed REIT in Korea."

Meanwhile, Lotte REITs, which resolved additional asset incorporation at the board meeting on the 12th, plans to obtain shareholder approval for the incorporation of new assets through a general shareholders' meeting next month and aims to complete the additional asset incorporation by the end of March 2021 after going through related permits and approvals and internal approval procedures of the transaction counterparties.

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