À̹ÌÁö È®´ë Real estate investment trust (REIT) stocks that rushed with listings amid fervid real estate demand are being shunned by retailers on the Seoul bourse who now chase stocks that deliver at least double-digit returns.
IGIS Residence REIT, a real estate investment trust (REIT), and Mirae Asset MAPS REIT opened their first day on Kospi on Wednesday at 4,500 won, down from IPO price of 5,000 won, or more or less at the daily bottom for the first-day stock.
The two stocks that opened at the price of 4,500 won plunged even further during trading. IGIS Residence REIT finished 6.89 percent lower versus opening price at 4,190 won on Wednesday while Mirae Asset MAPS REIT 3.33 percent at 4,350 won.
IGIS Value REIT, the country¡¯s first REIT to go public, also trades below its IPO.
The REITs¡¯ underperformance decouples from the upbeat market. On Wednesday, benchmark Korea Composite Stock Price Index (Kospi) topped 2,300 mark to recover to pre COVID-19 level. REIT shares are struggling to absorb abundant capital that has flown into the market on the back of low interest rate.
In contrast to REIT category, pharmaceutical and bio section is on a roll.
Among pharmaceutical shares, four stocks hit their upper limit on Wednesday.
Hanmi Pharmaceutical Co. that struck a 1 trillion won deal to export technology for liver treatment drug material shot up by highest daily limit upon disclosure. Hanmi Science, the largest shareholder of Hanmi Pharmaceutical, also hit upper limit price on Wednesday, along with Chong Kun Dang Bio.
An unnamed official from REIT asset management company said that it is difficult for REIT shares to gain appeal with a single digit dividend at a time when bio shares are surging 30 percent every day.
Analysts predict drying in the REIT pipeline.
Mastern Premier REIT, for one, delayed IPO that was scheduled this month to later this year. JR Global REIT – due to go public on Friday – failed to attract public subscribers. Koramco Energy Plus REIT that will go public later this month saw competition from institutional investors limited at 5.89:1 during its book building session. The REIT company managed to raise 300 billion won in funds through IPO but hardly can be regarded a hit.
Only last month Lotte REIT and NH Prime REIT celebrated their IPO last month at daily ceiling.
An unnamed official from an asset management firm said that the change is all part of ¡°normalization¡± of REITs in the stock market and that unlike ordinary shares REIT shares should be seen as a long-term investment that generates dividends as profit.
Another official from an asset management firm said that for REIT shares to go upwards, companies need to appeal investors with growth potential of assets that back REIT shares.
By Hong Hae-jin and Lee Eun-joo
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]