Hanwha Asset Management, "Hanwha REITs Officially Moves to Incorporate Hanwha Group Headquarters Building"

Hanwha Asset Management announced on the 29th that 'Hanwha Entrusted Management Real Estate Investment Company (hereinafter Hanwha REITs)' is pursuing the acquisition of a new asset, the Janggyo-dong Hanwha Building. The plan is to diversify the portfolio by adding a prime office in the CBD (Central Business District) area to the existing assets and to enhance dividend stability.

According to Hanwha Asset Management, the asset management company (AMC) of Hanwha REITs, Hanwha REITs has agreed to purchase the Janggyo-dong Hanwha Building in Jung-gu, Seoul, from Hanwha Life Insurance for 808 billion KRW. This corresponds to a price of 35.9 million KRW per pyeong, which is similar to the price range of 34 to 40 million KRW per pyeong for major prime offices in the area traded over the past 3 to 4 years. The price was determined based on valuations by multiple appraisal firms in accordance with relevant regulations. A third-party external appraisal firm also provided an opinion on the appropriateness of the valuation.

The Janggyo-dong Hanwha Building is a prime office with a total floor area of approximately 25,000 pyeong, located a 2-minute walk from Euljiro 1(il)-ga Station, a core area in downtown Seoul, with a 100% occupancy rate. It is currently used as the headquarters building of Hanwha Group. The building was remodeled in 2019 with an investment exceeding 200 billion KRW, so additional costs related to building management are not expected to be significant.

If the Janggyo-dong Hanwha Building is successfully incorporated, Hanwha REITs’ total assets will increase to approximately 1.615 trillion KRW. With the expansion of asset size, benefits such as enhanced dividend stability and payment capacity, further credit rating upgrades, and increased market liquidity can be expected. Additionally, inclusion in the 'FTSE EPRA Nareit' index can be anticipated. The 'FTSE EPRA Nareit' index is a representative benchmark index for global REIT investments by institutional investors. Inclusion in the index could lead to an increase in Hanwha REITs’ stock price due to the inflow of global investment funds.

The rights offering scheduled for the end of the year after the asset acquisition is also expected to proceed smoothly. During the selection process for the lead underwriter of the rights offering, multiple securities firms expressed their intention to provide Letters of Commitment (LOC) for underwriting the new shares totaling 450 billion KRW.

With the acquisition of the Janggyo-dong Hanwha Building, general investors will have the opportunity to invest in the Hanwha Group headquarters located in a prime area of Seoul. Hanwha REITs holds preemptive negotiation rights for the Yeouido 63 Building and Hanwha Life Seocho Building. Continuous growth as an office REIT can also be expected in the future.

The shareholders’ meeting of Hanwha REITs to approve the agenda related to the asset acquisition will be held on the 31st. The asset acquisition process will be completed on the 28th of next month, when the transaction payment is made.

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