Mirae Asset's REITs to go public on Kospi next month promising dividend in 6% level

Choi Chang-hoon, real estate investment division head of Mirae Asset Global Investments, [Photo by Kim Ho-young]

Mirae Asset Global Investments Co., a pioneer among Korean capital in exploring overseas property investment, is going public with its real estate investment trusts (REITs) backed by its fulfillment assets in the United States next month.

“We will use our rich experience and network to give individuals the opportunity to invest in lucrative overseas real estate assets,” Choi Chang-hoon, real estate investment division head of Mirae Asset Global Investments, told Maeil Business Newspaper in a recent interview.

Mirae Asset Global REITs is set to go public on the country’s main bourse Kospi next month.

Mirae Asset Global REITs with 140 billion won ($116.8 million) under management is expected to raise between 70 billion and 80 billion from the public offering. The REITs will offer annual dividend return of around 6 percent with initial portfolio of underlying assets comprised of three distribution centers in the United States – two currently occupied by FedEx Ground, shipping giant FedEx’s subsidiary specializing in ground transportation, and another rented out to e-commerce giant Amazon.com. Both FedEx Ground and Amazon.com have about 11 years left in lease term as of the end of September.

Mirae Asset Global REITs plan to add two to three real estate properties in the U.S. to its investment portfolio by the end of this year, according to Choi.

Mirae Asset Global Investments envisions increasing the valuation of the REITs unit to 4 trillion won through aggressive M&A, as bigger REITs tend to have advantage in maximizing returns and attracting investments.

Choi advised investors to actively include REITs in their investment portfolio as REITs allow investors to spread risk while collecting stable returns from dividends.

REITs tend to serve as a good long-term investment tool with expected annual returns of 5 to 6 percent, said Choi. He is advising to place 20 to 30 percent of investment money in REITs.

Mirae Asset Global Investments, the asset management unit of Korea’s Mirae Asset Financial Group, has 17 trillion won invested in real estate properties across the world.

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