[Asia Economy Reporter So-yeon Park] Mirae Asset Global Investment Management’s Mirae Asset Global Trust Management Real Estate Investment Company (Mirae Asset Global REIT) announced on the 30th that it completed the change approval on the 18th and will actively proceed with a new capital increase of approximately KRW 460 billion in July to incorporate new assets.
Mirae Asset Global REIT is a perpetual listed REIT that invests in real estate such as logistics centers, data centers, and offices leased long-term by high-quality tenants located in key regions of major advanced countries including the United States.
At the subscription in November last year, it recorded the highest demand forecast and individual subscription competition rate among listed REITs, and after entering the KOSPI in December, it achieved remarkable results with a steady upward trend for about six months, growing approximately 30% compared to the public offering price.
The secret to this stock price increase appears to be the appropriate balance of stability and profitability, as well as growth expectations reflected through the upcoming capital increase. Mirae Asset Global Investment Management has been preparing for the paid-in capital increase since the beginning of the year to meet these expectations.
The assets to be additionally incorporated through this capital increase consist of a total of 11 logistics centers: five assets in Southern California, including the Inland Empire, the largest logistics market in the U.S.; three assets in Utah, which has the fastest population growth rate in the U.S.; and two assets located in major cities and logistics markets in Texas and Nevada, part of the Sun-belt, which is attracting significant investor interest.
Mirae Asset Global REIT will also invest in strategic logistics assets leased long-term for over 10 years by global retailers Foot Locker and Academy Sports & Outdoors through this capital increase.
Through this, the portfolio shows a diversified composition across three tenant groups currently most active in new leases in the logistics market (e-commerce companies, distribution, and 3PL), allowing for portfolio diversification effects in terms of region and tenant groups, which is expected to significantly contribute to risk reduction even during economic downturns.
A representative from Mirae Asset Global Investment Management emphasized, "In times of high volatility like now, even REITs require investment decisions considering the market conditions of the real estate held to minimize risks and enjoy long-term capital gains," adding, "It is important to carefully assess the risks hidden behind the currently high dividend yields."
The U.S. logistics market, in which Mirae Asset Global REIT invests, is experiencing rapidly growing demand far exceeding supply, with vacancy rates nationwide at a historic low of around 4%, and rents have increased by about 13% over the past year.
In areas like the Inland Empire and Salt Lake City, vacancy rates are 0.8% and 1.8%, respectively, with annual rent increases of 29% and 17% in 2021, reflecting excellent market conditions that allow expectations for long-term rent growth and capital gains despite rising interest rates.
Meanwhile, Mirae Asset Global REIT plans to complete the capital increase with a public offering in mid-July and new stock listing in early August. Through this capital increase, it aims to newly emerge as a large REIT with a market capitalization of approximately KRW 640 billion and target inclusion in various ETFs, retirement pension funds, and REIT indices.
Park Joon-tae, Head of REIT Management at Mirae Asset Global Investment Management, stated, "We will do our utmost to grow into a mega REIT with a market capitalization exceeding KRW 1 trillion as soon as possible through additional capital increases of high-quality assets that can raise dividend yields next year without stopping at the current level."
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