Koramco Completes Establishment of Hyundai Motor REITs... Incorporates 11 Business Hubs Including Seongnae Office, Valued at 580 Billion Won

Koramco Asset Trust announced on April 23 that it has completed the establishment of the “Hyundai Motor Securitization REITs,” which is based on Hyundai Motor Company’s domestic business hubs as underlying assets, and has received business approval from the Ministry of Land, Infrastructure and Transport.

The Hyundai Motor REITs is a private real estate investment trust established by incorporating 11 business hub properties owned by Hyundai Motor Company nationwide, with a total value of 580 billion won. Hyundai Motor Company will sell these assets to the REITs and then lease them back on a long-term basis using a “sale and leaseback” method, thereby maintaining its existing business network and operations. The capital secured through this process will be used as investment resources for new growth businesses, including electrification and future mobility.

The assets incorporated into this REITs include seven automobile sales office buildings, two high-tech centers, one Hyundai Motorstudio, and one certified used car center, totaling 11 properties. Approximately 80% of the total asset value is concentrated in Seoul and the greater metropolitan area.

Representative assets include the Seongnae office building adjacent to Gangdong Station on Seoul Subway Line 5 and the Samsan office in Bupyeong, Incheon. The northern Seoul and Busan high-tech centers serve as large-scale maintenance and service hubs. After new centers are built and relocated, these sites can also be redeveloped into residential or mixed-use complexes, offering mid-to-long-term value appreciation potential.

The Busan high-tech center is located near Gyo-dae Station, a transfer station for Busan Subway Line 1 and the Donghae Line, which further enhances its development value.

The greatest strength of the Hyundai Motor REITs lies in its stable rental income structure. Hyundai Motor Company has entered into a direct, long-term, full-commitment lease agreement for all assets incorporated into the REITs. The rent is designed to increase by a fixed rate each year. For the REITs, this structure secures long-term, stable income without vacancy risk.

Based on this stability, Koramco has structured the dividend yield for preferred shareholders of the Hyundai Motor REITs at a minimum of 7% per annum, with a maximum of 7.5%.

Koramco Life Infra REITs will participate as the largest shareholder by investing approximately 50% in this REITs. The remaining shares will be invested by Hyundai Motor Company with about 30%, and Korea Investment & Securities with about 20%. Notably, Hyundai Motor Company has reinvested a portion of the proceeds from the asset sale back into the REITs.

Kim Cheolgyu, Head of REITs at Koramco Asset Trust, stated, “The Hyundai Motor REITs is not just a simple real estate purchase but a new securitization model that maximizes asset value while maintaining the company’s business hubs,” adding, “We will grow this REITs into a solid, leading domestic REITs by combining Hyundai Motor’s stable business infrastructure with Koramco’s real estate finance and management capabilities.”

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