Koramco Life Infrastructure REITs Expands Office Investments... Enhances Dividend Stability

Koramco Life Infrastructure REITs announced on the 27th that it is considering investing in the preferred shares of Koramco The One Gangnam No.1 REITs (The One Gangnam No.1), which owns the ‘Gangnam Station DF Tower,’ to strengthen dividend stability and diversify its portfolio.

Established in 2022, The One Gangnam No.1 is a REIT that owns the DF Tower, located very close to Exit 5 of Gangnam Station, a transfer station for Seoul Subway Line 2 and the Shinbundang Line. The DF Tower is an office building used as the headquarters by Dunamu, Korea’s leading blockchain and fintech company, and has maintained a ‘zero’ vacancy rate since 2018, making it a high-quality asset.

Dunamu has signed a gradual expansion and rent increase contract until 2027, creating a structure where The One Gangnam No.1’s income increases. Among Koramco Asset Trust’s office assets, which have held the number one position in the domestic private REIT market for 23 years, this asset is evaluated as outstanding in terms of growth potential.

Last month, the listed REIT Lotte REITs invested in the preferred shares of The One Gangnam No.1. This was a measure to increase Lotte REITs’ dividends, which had decreased due to rising financial costs caused by high interest rates.

The shareholders of The One Gangnam No.1 include Lotte REITs, the responsible tenant Dunamu, Samsung Securities, and Hana Securities. Dunamu holds 50% of the total shares as common stock, while the other investors participate with dividend-preferred shares. Koramco Life Infrastructure REITs is considering purchasing approximately KRW 39.5 billion worth of preferred shares held by Hana Securities. The two companies recently signed an exclusive memorandum of understanding for the share transaction.

Koramco Life Infrastructure REITs plans to enhance dividend stability through investment in the preferred shares of The One Gangnam No.1. The target dividend rate (dividend guide) announced at the time of Koramco Life Infrastructure REITs’ listing was an annual 6.2% based on the public offering price. Through steady value-add and asset sales, it is currently recording a dividend rate of 7.6% per year.

Koramco Life Infrastructure REITs recently held an investment advisory committee meeting to assess the suitability of the investment. The investment advisory committee is an advisory body composed of external experts well-versed in real estate, legal affairs, and accounting, established to advise the board of directors of Koramco Life Infrastructure REITs. It is reported that they conducted in-depth discussions on conflicts of interest and investment structure.

Koramco Life Infrastructure REITs, which owns major assets such as over 160 HD Hyundai Oilbank gas stations nationwide, logistics centers, and large home appliance stores including Samsung Electronics and LG Electronics, announced its mid- to long-term growth strategy ‘Vision 2030’ last year, promising a major shift in investment strategy. Starting with a re-indirect investment in the preferred shares of ‘Seocho Majesta City Tower 1,’ evaluated as the top ESG asset in Korea in December last year, it is actively expanding its portfolio into the office sector.

Yoon Jang-ho, Vice President and Chief Investment Officer of Koramco Life Infrastructure REITs, said, “Koramco is the asset manager that best understands the domestic office market and has secured many offices with high growth potential in major business districts.” He added, “We will discover investment opportunities that have proven profitability and stability in the long term for investors, and we will strive to establish Koramco Life Infrastructure REITs as a leading REIT in Korea.”