SK REITs to Pursue Listing Within the Year... Quarterly Dividends and Acquisition of Overseas Real Estate Planned

Office Buildings, Gas Stations, and Other Assets Worth 2 Trillion KRW
Raised 155 Billion KRW in Pre-IPO... Long-Term Investment Up
Public Offering Process in Q3 This Year... Industry's First Quarterly Dividend

▲SK Seorin Building exterior view

[Asia Economy Reporter Choi Dae-yeol] SK Inc. announced on the 30th that its subsidiary SK REITs (SK Trustee-Managed Real Estate Investment Company) will pursue a KOSPI listing in the second half of this year. The REIT, which focuses on real estate assets held by major SK Group affiliates, attracted market attention by raising 155 billion KRW through a pre-IPO investment round recently completed.

According to the company, following the board of directors' resolution to pursue the listing yesterday, it plans to proceed with the formal public offering process in the third quarter of this year. SK REITs, which received its business license from the Ministry of Land, Infrastructure and Transport this month, uses SK Seorin Building, the SK Group headquarters, and SK gas stations as its underlying assets. The company estimates the initial asset size to reach 2 trillion KRW.

SK Group affiliates are expected to lease most of the assets held by SK REITs on a long-term basis of 5 to 10 years. This provides a basis for expecting stable dividend income. For SK affiliates, selling real estate assets to SK REITs allows for efficient asset utilization and additional investment capital. The company explains that this business model benefits both the affiliates transferring real estate to the REIT and the REIT investors. After receiving the business license, SK REITs successfully raised investment from domestic institutional investors, meeting its target, with a large demand for long-term investments of over five years.

SK REITs Asset Management Company (AMC), responsible for managing SK REITs, appointed Vice President Shin Do-cheol, who led the REITs initiative, as CEO and recruited experts from domestic asset management firms and accounting firms. Approximately half of the SK Energy gas stations, considered major assets, are located in the Seoul metropolitan area. SK REITs AMC plans to enhance the asset value by transforming the gas stations into a complex service platform offering various services and benefits. Using funds raised through SK Inc.'s capital injection and pre-IPO investment, SK REITs AMC aims to complete the acquisition of assets such as Seorin Building and SK gas stations by early next month.

The public offering size is expected to be around 200 to 300 billion KRW. Unlike existing large listed REITs, which mainly hold portfolios based on market demand such as retail and logistics centers, SK REITs is characterized by having office buildings and gas stations with secured long-term lease demand from SK Group affiliates as its main assets. Notably, SK REITs will be the first in the domestic REIT industry to implement quarterly dividends, whereas domestic listed REITs have typically paid dividends semiannually.

The Korean REIT market is still considered in its early stages, indicating significant growth potential. According to the Ministry of Land, Infrastructure and Transport, the domestic REIT market has grown by about 24% annually since 2012 based on total assets. As of the end of last year, there are 282 REITs in Korea with total assets of approximately 61.3 trillion KRW. An SK official stated, "We aim to establish SK REITs as Asia's largest integrated REIT with balanced stability and growth by investing in global assets in the future."

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