REIT stocks in rare rally in Korean market on generous dividends and growth potential

2022.04.27 14:11:02 | 2022.04.27 14:12:24

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Real estate investment trust (REIT) issues are rare survivors in the bearish run on the Korean stock market as they ensure solid annual dividend payout of 5 to 6 percent and expand to bolster asset portfolio for sustained growth.

SK REIT, one of large-caps in REIT category capitalized at more than 1 trillion won ($792 million), has been rising throughout April except for three sessions. Koramco The One REIT surged 25.29 percent since its listing on Mar. 28. The big-caps have been renewing record highs in their prices.

Compared to 2018 when there had been six REIT stocks with a combined market cap of 614.7 billion won, 19 are in circulation capitalized at 8.42 trillion won as of Monday.

Assets under their portfolio surged from 1.64 trillion won in 2018 to 10.86 trillion won as of March this year.

Their presence on the market expanded in line with their generous dividend policy, on top of stable mix in their portfolio.

“Many of them have diversified underlying asset portfolios for high returns for the past three years,” said Bae Sang-young, a senior analyst at Daishin Securities.

The demand for the shares has been on the rise in the market with overwhelming losers.

Koramco Energy Plus REIT’s secondary offering drew the highest subscription rate of 143.5 percent. Its operator Koramco REITs & Trust is using the proceeds of 118.2 billion won to buy a logistics center in Incheon, a transportation hub in Korea.

Shinhan Alpha REITs carried out three recapitalizations since its listing in August 2018. Mirae Asset Global REIT prepares to offer shares worth 450 billion won in June to finance purchase of 11 logistics centers in the United States for Amazon, FedEx, and other retailers.

By Moon Ji-woong, Shin Hwa, and Jenny Lee

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