"Dongtan and Hadong Return-to-Farming Housing REITs" Preferred Stock Subscription via Cape Investment & Securities from July 2 to 4

- 2.8 Million Shares Offered to the Public via Cape Investment & Securities; Minimum Investment Starts at 1 Million KRW
- Simple Indirect Investment Structure Allows Participation Without Direct Real Estate Purchase

Hwaseong Dongtan Gyeongnam Hadong Return-to-Farming and Rural Settlement Housing Consignment Management Real Estate Investment Company (hereinafter referred to as the REITs) will begin accepting preferred stock subscriptions from general investors from Wednesday, July 2 to Friday, July 4.

The public offering will be conducted through Cape Investment & Securities. The total size is 2.8 million shares, amounting to approximately 14 billion KRW, which represents about 30% of the total issued shares. The shares will be issued as unlisted preferred stock, with a target annual dividend yield of 7.5%. The par value and issue price per share are both 5,000 KRW, and anyone can participate with a minimum subscription amount of approximately 1 million KRW. Subscribers can choose between Type 1 preferred shares without voting rights (minimum subscription of 200 shares, minimum subscription amount about 1 million KRW) and Type 2 preferred shares with voting rights (minimum subscription of 5,000 shares, minimum subscription amount about 25 million KRW).

The REITs conducting the public offering was established in 2021 as a real estate investment company after Korea Land & Housing Corporation (LH) announced the project, and a consortium was formed by DL E&C, Kyeryong Construction Industrial, Cape Investment & Securities, and Mirae Asset Securities. The company was established to develop and sell the “ePyeonhansesang Dongtan Park Honors” apartment complex and neighborhood living facilities on the Hwaseong Dongtan(2) A-56BL site, as well as return-to-farming and rural settlement housing and community facilities in the Agyang-myeon area of Hadong-gun, Gyeongnam. The Hwaseong Dongtan complex, which was supplied at a competitive price compared to similar-sized nearby apartments, is now mostly fully occupied, while the Hadong return-to-farming and rural settlement housing project is underway with a target completion date of December 2027.

This public offering is being conducted in accordance with the Real Estate Investment Company Act, which requires that a certain percentage of the total capital be offered to the general public. Previously, the REITs raised a total of 457 billion KRW, including land acquisition, construction costs, and financial expenses. This included approximately 411 billion KRW in project financing (PF) loans, 32 billion KRW in private common stock investments, and 14 billion KRW in preferred stock funds through this public offering. Of these, the 411 billion KRW in PF loans has been fully repaid using sales proceeds.

An official stated, "This public offering is being conducted as part of the requirement under the Real Estate Investment Company Act to offer 30% of the total capital to the general public," and explained, "It is a structure that allows investors to expect returns through equity participation without directly investing in physical real estate assets, so it is a good investment opportunity with a low entry barrier for general investors considering initial entry, as the burden is relatively low."

The official added, "With a minimum subscription amount as low as 1 million KRW, investment accessibility is high, and the potential for a certain level of dividend income makes it attractive."

DL E&C, ranked 5th in construction capability evaluation as of 2024 and holding a credit rating of AA-, and Kyeryong Construction Industrial are participating as construction companies in this project. Safety measures, such as the requirement to return construction costs in the event of a shortfall in project funds including investment dividends, have been put in place, which is highly regarded in terms of investment stability.

Detailed information regarding the subscription can be found on the REITs Information System, the Cape Investment & Securities website, and the electronic disclosure system (DART).