Spring Comes to the REITs Market... Investment Expansion Expected

Ritz Association, Q1 Listed REITs Investment Briefing Session

There are expectations that investment in the REITs (Real Estate Investment Trusts) sector will be revitalized this year, supported by interest rate cuts and government policies.

On the 28th, Jeong Byung-yoon, chairman of the Korea REITs Association, stated at the '1st Quarter Listed REITs Investment Meeting' held at the Air Force Hotel in Dongjak-gu, Seoul, "Thanks to the passage of the REITs Dividend Expansion Act, REITs stock prices have recently risen, signaling the arrival of spring in the REITs market," adding, "This year, REITs are expected to be revitalized with the help of interest rate cuts and various policy movements."

He continued, "If the United States cuts interest rates about three times this year, it is expected that South Korea will also see interest rate cuts," and said, "If this happens, REITs, which were in the worst situation at the end of last year, will fully recover."

Along with this, he also forecasted that the market would improve due to government policies aiming to use REITs to solve the local unsold housing problem. Chairman Jeong said, "The government is moving to utilize REITs not only for purchasing unsold houses and operating them as rentals but also in various fields such as the redevelopment projects of the first-generation new towns and silver stay," adding, "Accordingly, the investment areas of REITs, which have so far focused on housing and offices, will expand."

At the investment meeting, three listed REITs management companies attended: Lotte AMC (Lotte REITs), Samsung SRA Asset Management (Samsung FN REITs), and D&D Investment (D&D Platform REITs).

Yoon Young-joo, head of the REITs business division at Lotte AMC, said, "Although the funding interest rates have risen over the past three years, refinancing is underway this year at lower interest rates compared to existing rates, so dividend levels are expected to be adjusted upward," adding, "If the interest rate decline becomes visible this year, we will aim to repay borrowings raised at high interest rates as early as possible to expand dividend resources."

He also said, "We are discovering new growth sectors such as data centers as investment destinations," and added, "Although the current real estate finance market situation is challenging, we will turn the crisis into an opportunity to improve cash flow and enhance shareholder value."

Kim Sung-hwan, head of Investment Division 1 at D&D Investment, said, "Considering government policies and potential demand, we are discovering new growth sectors," and added, "We are in discussions to invest in shared offices, laboratory operators, and 'Life Science Offices' (offices that provide facilities necessary for research, development, and production in the bio and pharmaceutical fields)."