For the acquisition, it will raise capital from Meritz Securities Co. Ltd. and other domestic institutional investors and the remainder through the REIT.
A consortium backed by Meritz Securities is in exclusive talks to buy the Finance Tower from Dutch property company Breevast BV, Bloomberg reported in September. It is leased to the Belgian government for more than 15 years.
The REIT will offer a target yield of 8% or above and expand its portfolio into other office buildings in gateway cities in developed countries, according to a recent report from online news media the Bell.
Individual investors are showing strong appetite for indirect property investment, just as Korean pension and retirement funds turned cautious about overseas property investments.
Last week, NH Prime REIT Co. Ltd. attracted 7.75 trillion won in subscription deposits from individual investors for its IPO scheduled for December.
It was the largest amount for a South Korean IPO since Netmarble Corp., a game developer, brought 7.77 trillion won in subscription deposits for its 2017 offering.
The retail portion of the offer was 317.6 times oversubscribed, setting a record for a domestic REIT IPO.
NH Prime REIT invests in funds owning landmark office buildings in Seoul for a target yield of 5.5% on average during a seven-year investment period. It is the first listed REIT investing in property investment funds.
Meanwhile, a domestic property fund investing in an Australian developer focusing on housing for the disabled had raised 326.5 billion won from both institutional and individual investors in the first half of this year.
But KB Securities Co. Ltd., the fund’s seller, recently warned of possible losses from the investment fund due to the Australian borrower’s breach of contract.
Write to Byeonghun Yang at
hun@hankyung.com