Aegis Asset Management "Considering Sale of German Office Building Fund Investment"

Fund Profitability Red Light... Preventing Further Deterioration

Aegis Asset Management announced on the 17th that it is considering selling the German office building it has invested in to prevent further deterioration of the fund's profitability.

On the same day, Aegis Management posted a notice on its website explaining the risk status and measures of Aegis Global Real Estate Investment Trust No. 229.

The main tenant of the German Trianon office building, Dekabank, which is the investment target, did not exercise the lease renewal option, signaling a red light for the fund's profitability. The lease contract is set to expire in June 2024.

Dekabank has accounted for more than half of the rental income proportion related to the fund's assets. Aegis Management has focused on attracting new tenants and has been working on securing funds through additional contributions from domestic institutions to cover acquisition costs. So far, inquiries regarding refinancing have been sent to about 130 potential major lenders, among which five have expressed interest in refinancing through mezzanine (subordinated) loans.

In the notice, Aegis Management stated, "Due to recent domestic and international market conditions, it is not easy to smoothly raise funds," adding, "If sufficient funds at the level required by the major lenders are not raised, asset stabilization of the fund may not be easy."

It continued, "In this case, discretionary sale of the Trianon office may be necessary through deliberation and resolution by the internal committee." Furthermore, it explained, "If the discretionary sale process fails, there is a possibility of forced sale due to workout or exercise of major lender collateral rights," and "at that time, additional asset value decline and delays in the sale process may occur."

The size of the fund is a total of 370 billion KRW, initially raised through a public offering fund (186.5 billion KRW) and a private placement fund (183.5 billion KRW). Major investors in the private placement fund include Hana Securities and Kiwoom Group, while the public offering fund was reportedly sold through KB Kookmin Bank, Daishin Securities, and Korea Investment & Securities.

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