[Asia Economy Reporter Jang Hyowon] Kookbo, a logistics company listed on the KOSPI and based in Busan, has recruited Oh Changseok, chairman of Mugunghwa Trust, one of Korea’s leading real estate trust companies, as a new director.
On the 5th, Kookbo held an extraordinary general meeting of shareholders at its headquarters in Suyeong-gu, Busan, and appointed Oh Changseok, chairman of Mugunghwa Trust, Park Chanha, CEO of Cheonjien M Partners, and Ahn Gyehwan, former CEO of Paratech, as inside directors.
Additionally, former POSCO chairman Jung Junyang and lawyer Lee Eunjae of the law firm Kwangjang were appointed as inside directors, and former National Tax Service tax office chief Kang Jeongmu was confirmed as auditor.
Kookbo had previously announced that on the 1st, it became the largest shareholder through a paid-in capital increase of 16 billion KRW in ‘M Real Estate Growth No.1 Investment Purpose Company,’ a special purpose company (SPC) established by Cheonjien M Partners, an affiliate of Mugunghwa Trust.
Kookbo views the participation of directors such as Chairman Oh Changseok and former Chairman Jung Junyang as a significant opportunity for large-scale capital expansion planned in the future, as well as strengthening competitiveness in the existing logistics industry and diversifying its business.
According to Kookbo’s disclosure, M Real Estate Growth No.1 plans to invest an additional approximately 80 billion KRW in funds, including convertible bonds (CB), by February next year. Additionally, Navan Holdings is expected to participate in a 40 billion KRW capital increase of Kookbo by June next year.
In particular, Mugunghwa Trust is securing logistics centers through its subsidiaries, so Chairman Oh Changseok’s participation in Kookbo’s management is expected to be a catalyst for strengthening logistics competitiveness and business diversification.
Mugunghwa Trust, as of 2012, recorded an operating profit of 123.9 billion KRW and a net profit of 36.7 billion KRW, making it one of the leaders in Korea’s real estate trust industry. It oversees Current Asset Management, real estate specialized investment company K-REITs Investment Management, and Mugunghwa Capital, a credit specialized company in the real estate sector.
Mugunghwa Capital has built a large-scale logistics center network nationwide through these financial subsidiaries, and K-REITs Investment Management invested 518 billion KRW in May this year to develop the Gimhae Integrated Logistics Center, which is expected to be completed by 2024 with a total floor area exceeding 300,000 square meters. Earlier, in October, K-REITs Investment Management completed a three-story logistics center with a total floor area of 35,000 square meters in Nogok-ri, Gwangju, and also owns logistics centers in Cheonan, Yeoju, Jincheon, and Yeoncheon.
Furthermore, Current Asset Management acquired the ‘Deokpyeong CJ Logistics Center’ in Icheon-si, Gyeonggi-do, for 130 billion KRW in March this year. The Deokpyeong CJ Logistics Center is a state-of-the-art logistics center built on a site of approximately 66,115 square meters (20,000 pyeong) in Maegok-ri, Hobeop-myeon, Icheon-si, with a total floor area of about 58,512 square meters (approximately 17,770 pyeong).
At the shareholders’ meeting, Chairman Oh Changseok stated, “The greatest essence of real estate trust and logistics business is trust, as customers entrust their assets with confidence, so the two industries are alike,” and added, “I will do my best to help Kookbo make a new leap forward based on the trust it has built over 68 years in the logistics sector.”
A Kookbo official said, “The most important factors in logistics are optimizing transportation costs, storage costs, and transportation time,” and evaluated, “Since Mugunghwa Trust has state-of-the-art logistics centers almost everywhere nationwide, combining them with Kookbo’s logistics network will enable us to provide optimized transportation and storage services to shippers.”
He added, “The reason Mugunghwa Trust, which has focused on building a nationwide logistics network through securing logistics centers, is investing a huge amount of capital in Kookbo seems to be because it is directing business diversification towards logistics and logistics centers,” and noted, “As of 2020, the domestic logistics industry market size reached 114 trillion KRW.”
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