Sindo Cheol, CEO of SK REITs, "Will Incorporate SK Group's Prime Assets to Become a National REIT"

Secured with SK Seorin Building and 116 Gas Stations Assets
Quarterly Dividends Paid, Annual Average Dividend Yield 5.45%

On the 18th, Shin Do-cheol, CEO of SK REITs, attended an online IPO press conference and explained the characteristics of SK REITs.

[Asia Economy Reporter Minji Lee] “We will continuously incorporate assets linked to SK Group’s core businesses such as data centers, energy, logistics centers, and overseas assets to leap into a global top-tier REIT worth 10 trillion KRW.”

On the 18th, Shin Do-cheol, CEO of SK REITs, made this statement during an online press conference. SK REITs is a REIT with SK Group as the major shareholder. Currently, its main incorporated assets include the SK Seorin Building valued at about 1 trillion KRW and a 100% stake in the Clean Energy REIT (land and buildings of 116 gas stations nationwide).

The most important factor in public REIT investment is what kind of assets are incorporated and the related dividend yield set. SK REITs holds the SK Seorin Building office and highly utilized gas stations along with their land and buildings. The average official land price increase rate of the gas station land is 4.8%, and most (48%) are located in the Seoul metropolitan area, making the investment value high. CEO Shin said, “Among the 116 gas stations, we will select those that can be developed and evolve them into SK Energy’s next-generation distribution network (electric vehicle charging stations and logistics center locations).” He added, “In terms of development value, the gas stations have greater value than the Seorin Building and will play a role in increasing dividends in the future.”

Further asset incorporation and securitization are also expected. SK REITs holds the right of first refusal to negotiate the purchase of key real estate assets owned by SK Group, and the cumulative assets are expected to reach about 4 trillion KRW by 2024. Related assets such as the SK Planet building, SKT Tower, and SKU Tower are all prime assets located in the central business district (CBC) and Bundang business district (BBD). CEO Shin said, “Looking at the proportion of assets under additional review, many are office buildings because they are easily accepted by the market and highly versatile.” He also mentioned, “We will incorporate assets linked to group businesses such as data logistics centers and production facilities, with semiconductor and energy-related assets being prioritized.”

The annual dividend yield excluding capital gains over the next three years is 5.45%. This is more than six times the return on deposits and three to four times that of AA-rated corporate bonds. For the first time in the REIT industry, quarterly dividends will also be paid. CEO Shin said, “The rent is under a long-term master lease structure, so revenue fluctuations are blocked, and insurance premiums and taxes are borne by tenants, creating a stable structure.” He added, “When entering the general subscription, dividends can be received based on the fiscal year ending in late September, and assuming the dividend payment shareholders’ meeting is held at the end of December, the dividend payment will be made in early January.”

SK Group is expected to accelerate securing funds for new business investments through the listing of SK REITs. This is because it can secure investment funds by providing high-quality assets of affiliates related to secondary batteries, energy, ICT & mobility, semiconductors, eco-friendly businesses, and pharmaceutical & bio sectors to SK REITs. CEO Shin said, “SK Group’s agenda is not to hold real estate assets passively but to actively securitize them and invest aggressively in ESG.” He explained, “This was decided by SK’s highest decision-making body, the SK Supex Council, last September, and we will actively utilize REITs.”

Meanwhile, the public offering price of SK REITs is 5,000 KRW per share, with approximately 46.5 million shares offered. Through this public offering, 232.6 billion KRW will be raised. Demand forecasting will be conducted for domestic and foreign institutional investors over two days from the 23rd to the 24th, followed by a three-day general investor subscription from August 30 to September 1, with listing scheduled in September. The lead underwriters are Samsung Securities and Korea Investment & Securities, with Hana Financial Investment as the underwriter. SK Securities participates as a joint lead manager.

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