Growing Interest in Real Estate Indirect Investment with Monthly Rental Income... REITs and Exchange Markets Expand

[Asia Economy Reporter Ryu Tae-min] Amid increasing stock market volatility due to liquidity tightening and interest rate hikes, demand is focusing on the indirect real estate investment market based on tangible assets. Recently, various real estate products such as dividend REITs and overseas real estate ETFs, which offer stable returns comparable to dividend stocks while allowing investors to acquire shares of buildings in major areas with small amounts, have been emerging and gaining popularity.

Kasa, a real estate digital revenue securities platform, is a representative example. Kasa announced that all 1.69 million digital revenue securities (DABS) prepared for the public offering of its third building, Yeoksam Korea Technology Center, were sold out within a day of subscription in September. This amounts to approximately 8.45 billion KRW.

Kasa pays dividends every three months based on the rental income of the buildings. The company stated that buildings listed on its platform are expected to yield an annual dividend return of up to 3.5%. The complete sale of the third building has attracted investor interest as those who invested in the first building, Yeoksam Londonville, and the second building, Seocho Jiwell Tower DABS, can receive monthly dividends. Kasa is preparing for the public offering of its fourth building soon.

A Kasa representative said, “We pay rental income from buildings 1, 2, and 3 to investors every three months in the form of dividends. Investors are interested because they can earn stable fixed income like building owners and also gain capital gains when trading DABS.”

Not only platforms but also the domestic REITs market is heating up. SK REITs, which attracted attention as the first REIT to implement quarterly dividends, set a record for the largest subscription deposit in REIT history by attracting over 19 trillion KRW in public subscription funds during the three-day general public offering from August 30 to September 1. SK Group’s ‘sponsor REIT,’ which leases assets long-term and pays rent, has secured creditworthiness and stability. It also drew significant investor interest by becoming the first in the domestic REIT industry to implement quarterly dividends. Recently, it is known to have submitted a policy inquiry to the Ministry of Land, Infrastructure and Transport requesting permission for monthly dividends, drawing attention to whether this will be accepted.

Beyond Korea, dividend-activated U.S. stocks are also popular. Realty Income ETF, a representative monthly dividend-paying REIT among U.S.-listed REITs where quarterly dividends are common, ranked within the top 50 most net-purchased stocks by Korean investors over the past three months (40th place, according to Korea Securities Depository’s SaveRo statistics as of the 12th). Realty Income, a U.S. real estate REIT company, owns over 6,600 retail commercial facilities in the U.S., Puerto Rico, and the U.K., with major tenants including large franchises such as 7-Eleven, FedEx, and Walmart.

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