Koramco Life Infra REITs Sells 3 Assets... Accelerating 'Value-Up'

Koramco Asset Trust announced on the 30th that it has signed sales contracts for three gas station assets owned by Koramco Life Infrastructure REIT. This comes three months after announcing the sales plan in February.

Koramco Life Infrastructure REIT is Koramco Asset Trust's representative listed REIT, holding over 160 HD Hyundai Oilbank directly operated gas stations nationwide, large appliance stores such as Samsung and LG Electronics, Coupang fulfillment and last-mile logistics centers, and drive-thru (DT) stores of major F&B brands like McDonald's and Paul Bassett. Recently, it has diversified its investment targets by investing in Majesta City Tower 1, a landmark office building in the Seocho business district.

In February, Koramco Asset Trust decided to sell nine gas stations owned by Koramco Life Infrastructure REIT. This is part of a value-add strategy to reduce the sales proportion from gas stations and restructure the portfolio into various lifestyle and cultural assets.

Three gas stations?Daejeon Jungang-ro Self Gas Station, Gangwon Samcheon-ri Gas Station, and Sincheorwon Gas Station?will be sold for 12.9 billion KRW. The sales proceeds will be used for special dividends and new business investments. Given the recent uncertainties in the real estate market due to the PF crisis and the fact that asset sales typically take at least six months, this sale is evaluated as successful in terms of both sale price and speed of execution.

Additional assets in the metropolitan area will also be sold to increase the dividend rate. Last year, Koramco Life Infrastructure REIT's annual dividend rate was 6.9% based on the public offering price. The special dividend from the sales is expected to slightly raise the dividend rate. As of the previous day, Koramco Life Infrastructure REIT's stock price was slightly below the public offering price. The relative market dividend yield is expected to be even higher. According to the Korea REITs Association's listed REIT market status, as of this date, Koramco Life Infrastructure REIT's market dividend yield is 7%.

At the time of listing, Koramco Life Infrastructure REIT's revenue was composed 100% from gas stations. Now entering its fourth year since listing, Koramco Life Infrastructure REIT's portfolio has diversified to 48% gas stations, 32% logistics centers, 11% retail, 5% electric vehicle charging stations, and 3% office. Koramco Asset Trust recently announced plans to enhance profitability by adding small and medium-sized hotels to Koramco Life Infrastructure REIT. It disclosed plans to acquire small and medium-sized hotels in Hongdae, Seoul, and Guwol-dong, Incheon.

Yoon Jang-ho, Vice President of Koramco Asset Trust, said, "Koramco Life Infrastructure REIT is evolving into an ‘investment platform’ that invests in various industries, not just a REIT managing real estate," adding, "As a REIT managed by real estate experts, we will continue to show growth through diverse sector investments."