Hyundai Asset Management Invests in Stake of Amazon Logistics Center in Connecticut, USA

[Asia Economy Reporter Lim Jeong-su] Hyundai Asset Management has made an equity investment worth 35 billion KRW in a REIT (Real Estate Investment Trust) that is acquiring Amazon logistics centers.

According to the investment banking (IB) industry on the 5th, Hyundai Asset Management formed a private equity fund called ‘Hyundai Infinity General Private Real Estate Investment Trust No. 3’ and invested 29 million USD (approximately 35 billion KRW) in the REIT’s equity. The investment funds were raised by securitizing the fund’s beneficiary certificates. Hana Financial Investment was in charge of underwriting the securitization of the beneficiary certificates.

The REIT invested in by Hyundai Asset Management through the fund will invest the received capital into a joint venture (JV) that acquires equity in Amazon logistics centers. The JV will use a total of 78.5 million USD (950 billion KRW), including private equity funds from Hyundai Asset Management, to acquire the logistics centers.

Danbury is a small to medium-sized city with a population of about 100,000 located in the state of Connecticut in the northeastern United States. Although the city is small, it is considered a logistics hub due to its proximity to the U.S. East Coast and its location 1 to 2 hours away from New York.

This logistics center is known to be leased long-term (master lease) by Amazon. Amazon will pay rent to the REIT, and the REIT will distribute the received rent as dividends to investors. With the world’s largest e-commerce company as the tenant, rental income is expected to flow in stably.

An IB industry official said, "As investment institutions such as pension funds, mutual aid associations, and asset management companies have started to expand overseas alternative investments since the beginning of the year, investments in advanced country real estate in the U.S., Europe, and other regions, including relatively profitable logistics centers, are expected to continue increasing."