[Click eStock] "SK REITs: Growth and Dividend Up... 35.5% Upside Potential"

"Expected Dividend Yield for This Year: 5.8%"

On July 3, Daishin Securities initiated coverage on SK REITs, stating, "The company secures leasing stability and funding competitiveness based on its large corporate sponsor." The firm assigned a "Buy" investment opinion and set a target price of 6,300 won.

Lee Hyejin, a researcher at Daishin Securities, said on the same day, "There is an upside potential of 35.5% from the current share price, and the expected dividend yield for this year is 5.8%."

SK REITs is a sponsor REIT backed by a large conglomerate (SK Group), with the group serving as a key tenant, major shareholder, and pipeline provider. SK Inc. holds a 31.7% stake in the REIT, and the underlying assets have a stable lease contract structure based on the sponsor.

Lee explained, "SK REITs has secured funding competitiveness by holding a corporate credit rating of AA-, the highest among domestic listed REITs. It was also the first listed REIT in Korea to introduce quarterly dividends, with settlement months in March, June, September, and December."

Currently, SK REITs owns assets totaling 4.9 trillion won in assets under management (AUM), including SK Seorin Building, SK C Tower, and Jongno Tower in the CBD (Central Business District), SK U Tower in the BBD (Business Sub-District), 111 gas stations nationwide, and five SK hynix Icheon water treatment centers.

Lee emphasized, "Most of the assets, such as SK Seorin Building, SK U Tower, gas stations, and water treatment centers, are 100% master-leased by SK Inc., SK hynix, and SK Energy, which are group affiliates. All ancillary costs, including management fees, insurance premiums, and taxes, are also borne by the tenants under a triple net lease structure."

SK REITs actively utilizes its gas station assets as a key means of securing dividend resources and for portfolio rebalancing (asset allocation). In September 2023, the company sold two gas stations, realizing a capital gain of 12.9 billion won, which was fully returned to shareholders as a special dividend. Last year, SK REITs pursued the sale of a total of 31 gas stations for shareholder return and portfolio restructuring, completing nine sale contracts. In addition, three more sales were completed within the year, resulting in a capital gain of approximately 1.3 billion won. As a result, the per-share dividend for the first quarter of 2025 was raised to 70 won, up from the previous guidance of 66 won.

Lee added, "SK REITs aims to expand its AUM to over 10 trillion won in the future. In addition to the group’s prime office holdings, the company plans to actively incorporate high-yield assets that are expected to increase dividends and generate capital gains from asset sales, thereby continuously pursuing external growth and strengthening and expanding its stable dividend base."