AK Plaza Reacquires Bundang Branch... "Will Enhance Store Competitiveness"

Sold to Capstone Asset Management in 2015 to Improve Financial Structure
Investment in Bundang Branch Expanded by Securing Additional Beneficiary Certificate Shares

AK Plaza announced on the 5th that it has reacquired the Bundang branch and will aggressively expand its business.

Recently, AK Plaza secured the largest shareholding through the additional issuance of beneficiary certificates (Capstone Private Real Estate Investment Trust No. 14) of a real estate fund that holds the Bundang branch as an investment asset. In 2015, AK Plaza sold the Bundang branch to Capstone Asset Management and operated the store under a sale-and-leaseback arrangement to improve its financial structure. Capstone Asset Management currently operates a private real estate fund with the Bundang branch as its investment asset.

AK Plaza Bundang Branch exterior, provided by AK Plaza.

The acquisition of beneficiary certificate shares began from a consensus between AK Plaza and the fund manager, Capstone Asset Management, that sales growth and profitability improvement of the Bundang branch are key tasks to increase the value of the real estate fund.

AK Plaza’s strategy is to reinvest for the sustainable growth of the Bundang branch, starting with securing the largest shareholding. First, it plans to create a community-friendly complex cultural space through the renewal of the cultural academy and expand the customer lounge within the year to improve customer convenience.

Additionally, from a mid- to long-term perspective, AK Plaza plans to renew the department store’s merchandise composition (MD). It will revamp the VIP system to enhance customer shopping benefits and strengthen its core competitiveness by configuring MD that reflects the unique characteristics of the commercial district and the store.

AK Plaza expects the Bundang branch’s commercial district to be revitalized following the government’s promotion of the first-generation new town reconstruction project. An AK Plaza official stated, “Despite intense competition, AK Plaza Suwon branch recorded sales growth last year, and the Hongdae branch achieved a growth rate 23.2% higher than the previous year. We will not only relaunch the Bundang branch but also strengthen the competitiveness of the four department stores and seven shopping malls currently in operation, and actively improve performance by expanding online sales channels.”