Iritsukokeureb, Successful Block Deal for Conversion to Entrusted Management REITs

[Asia Economy Reporter Park So-yeon] IRITZ KOREIT has succeeded in a block deal for its transition to a 'delegated management REIT.'

According to the investment industry on the 26th, this block deal involved selling 6.8% (4,305,906 shares) of E-Land Retail's total stake to the Housing and Urban Fund Anchor REIT under the Ministry of Land, Infrastructure and Transport, conducted through an off-hours large-volume trade on the 22nd.

IRITZ KOREIT lowered the stake of its major shareholder, E-Land Retail, to 50%, thereby meeting the requirements for transitioning to a delegated management REIT. After the transition, it will be possible to include general assets beyond E-Land Retail stores, allowing for an expansion of investment targets.

Listed in June 2018, IRITZ KOREIT was a representative retail-listed REIT that marked the starting point for revitalizing the domestic listed REIT market. However, as it was uniquely a 'corporate restructuring REIT,' its assets were composed mainly of real estate held by E-Land Retail.

This block deal is part of IRITZ KOREIT's transition to a delegated management REIT. Since last year, major shareholder E-Land Retail has been gradually reducing its existing 75% stake to convert IRITZ KOREIT into a delegated management REIT, continuously expressing its intention to actively incorporate external assets.

Additionally, with the Housing and Urban Fund Anchor REIT purchasing a 6.8% stake in IRITZ KOREIT and becoming the second-largest shareholder, it is expected that stock price stabilization and the transition to a delegated management REIT will accelerate.

The investment background of the Housing and Urban Fund Anchor REIT is interpreted as placing weight on the stability of IRITZ KOREIT's outlet stores located in Seoul and first-phase new towns, the high dividend yield in the mid-6% range, and the potential for future delegated management REIT restructuring.

An IRITZ KOREIT official stated, "This block deal fundamentally resolves the overhang issue caused by large-scale buying and selling and is expected to provide individual investors with confidence in stable stock price maintenance through the attraction of reputable funds capable of long-term investment," adding, "It will be a major driving force for the transition to a delegated management REIT to expand investment targets in the future."

Meanwhile, the Housing and Urban Fund Anchor REIT was planned by the Housing and Urban Fund under the Ministry of Land, Infrastructure and Transport to revitalize public real estate indirect investment and was launched to add stability to individual investors' investments in public REITs and public real estate funds.