LH Announces Public Offering for S-2 Housing Development REIT Operator in Gwacheon Knowledge Information Town

Anyone in the Nation Can Participate as a REIT Business Shareholder with Stable Dividend Yields of 6-9%
Increased Public Offering Ratio, Higher Dividend Yield and ESG Management Practice Evaluation Scores
Public Offering Application from April 18-20, Business Application Submission on June 29, Priority Negotiation Candidate Selection in July

[Asia Economy Reporter Kangwook Cho] Korea Land and Housing Corporation (LH) announced on the 30th that it will hold a public offering for private sector operators of the ‘Housing Development Public REITs,’ which shares development profits generated from housing sales projects with the public, and will accept letters of intent to participate starting from the 18th of next month.

The ‘Housing Development Public REITs’ was introduced to eliminate side effects arising from the lottery-based supply method of apartment sites under the Ministry of Land, Infrastructure and Transport’s ‘Improvement Plan for Apartment Site Supply System’ and to share development project profits. The first pilot project was publicly offered and implemented last June.

This project expands the existing housing development REITs by including a public stock offering. A private sector operator, consisting of a consortium of construction and financial companies, establishes a REIT and purchases LH apartment sites through the REIT to build and sell housing, maintaining the basic business structure of housing development REITs. Additionally, the proportion of public stock offerings to the public during the REIT’s capital raising process is increased, allowing the public to participate as shareholders in the REIT project and receive stable dividends of 6?9%.

LH is responsible for selecting private operators and supplying land, while private operators handle REIT establishment, fundraising, stock offerings, design, construction, and sales. Private operators are selected through quantitative and qualitative evaluations. The ‘quantitative evaluation’ items include △stock offering quantitative plan △capabilities of financial and construction companies, and the ‘qualitative evaluation’ items include △stock offering and financial plans △development plans △housing and construction ESG management implementation plans. In particular, this public offering increases the proportion of shares offered to the general public and raises the evaluation scores for ESG management implementation plans, thereby expanding opportunities for general shareholder participation and encouraging ESG management practices.

The project site is the Gwacheon Knowledge Information Town S-2 apartment site, known for its excellent sales potential, with recent private apartment first-priority subscription competition rates averaging 718 to 1. It has a geographical advantage close to Gangnam and is near Indeogwon Station and Gwacheon Government Complex Station on Subway Line 4. Furthermore, the opening of a subway Line 4 station within the district is planned, providing abundant transportation benefits. The area also boasts excellent living infrastructure and educational environments, making it highly desirable for residence. Additionally, knowledge-based industrial sites are planned within the district, and the self-sustaining functions and future demand are abundant through the knowledge-based business belt connecting Gangnam, Pangyo, and Gwacheon.

LH will accept letters of intent from the 18th to the 20th of next month, receive project applications on June 29, and select the preferred negotiation candidate in July. Private operators must apply as a consortium consisting of no more than two financial companies and two construction companies each. After the public offering, the following will proceed: △REIT establishment (September 2022) △stock offering, groundbreaking, and sales (June 2023) △REIT liquidation (September 2026).

An LH official stated, "As this block has high demand and expectations for sales, we will induce high-quality housing construction through the competitive supply method of housing development public REITs and stock offerings, and share development profits with the public."

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