Samsung Electronics Europe Headquarters Investment 'KB Starits' Pre-IPO Completed

[Asia Economy Reporter Junho Hwang] KB Financial Group's first publicly offered listed REIT, 'KB Star REITs Trust Real Estate Investment Company (hereinafter KB Star REITs),' has successfully raised investor funds in a Pre-IPO round before its listing.

KB Asset Management announced on the 4th that the payment of 346.5 billion KRW, which was planned to be raised through the Pre-IPO, has been completed.

The total planned fundraising amount for this REIT is 500 billion KRW, with about 70%, or 346.5 billion KRW, raised through the Pre-IPO, and about 30%, or 153.5 billion KRW, to be raised through the public offering.

Among existing listed REITs, there has been no case where approximately 70% of the total fundraising amount was raised through a Pre-IPO. KB Asset Management stated, "We maximized the participation rate of institutional investors during the Pre-IPO," adding, "This is a measure to enable individual investors to trust and invest with confidence."

Institutional investors participating in the Pre-IPO are subject to a lock-up period of one year from the time of investment, which helps stabilize the stock price. From the perspective of individual investors, they can verify the institutions that participated in the Pre-IPO through the securities registration statement, creating a more trustworthy environment for investment.

KB Asset Management analyzed that the success in fundraising was due to the REIT’s underlying assets being specialized for inflation hedging. This REIT includes the North Galaxy Tower in Belgium and Samsung Electronics' European Headquarters in the UK, meaning it has high-quality tenants such as the Belgian government and Samsung Electronics. The lease contracts are structured so that rent increases annually in line with inflation. Therefore, even if interest rates rise, the dividend yield will not decline. As the rent increases, the asset value can steadily appreciate.

Another key to success was KB Financial Group acting as the anchor investor. KB Asset Management plans to continuously incorporate high-quality assets by leveraging KB Financial Group’s network and aims to expand the scale to 10 trillion KRW within the next 10 years.

Im Hyun-kyu, Head of the REIT Management Division at KB Asset Management, explained, "Recently, the name of KB Star REITs was changed from 'KB Star Global REITs' to 'KB Star REITs' to emphasize that it is not a REIT investing only in overseas assets," adding, "It will be a good investment opportunity for investors seeking stable dividend income."