Mirae Asset Global REIT despite hot IPO subscription demand debuts modestly

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

Mirae Asset Global REIT backed by Mirae Asset Global Investments Co. which drew eager demand from institutions and individuals amid stronger investor appetite for REIT stocks in Korea this year has debuted on a subdued note, trading barely a tad above the initial public offering price of 5,000 won ($4.2).

Shares of Mirae Asset Global REIT are trading at 5,210 won in early afternoon trading on Friday on the country’s main Kospi bourse, slightly above the IPO price of 5,000 won.

A REIT refers to an investment vehicle that allows investors invest only a small sum of money and enjoy the financial benefits of owing high-priced real estates. It is designed to offer stable annual dividend returns to its investors through incomes from securitized real estate assets ranging from residential buildings, offices to hotels.

Korea has seen surge in demand for REIT stocks from investors looking for ways to hedge against market volatility. So far this year, retail investors have placed 42.5 trillion won deposits through public subscription for REIT stocks.

Mirae Asset Global REIT’s book building was 1,019 times oversubscribed by institutional investors, the most competitive among the Korean REITs. Its IPO was 753.4 times oversubscribed by retail investors. It drew a total subscription deposit of 11.3 trillion won.

Mirae Asset Global REIT is a perpetual-life REIT focused on investing in logistics centers, datacenters, and office buildings located in the U.S. and Europe. It currently owns three logistics properties of Amazon in Huston and Fedex in Tempa and Indianapolis worth 450 billion won in total.

It aims to yield an average dividend rate of 6 percent over a 10-year period based on stable rent income and is planning to add more prime commercial properties worth over 1 trillion won to its asset portfolio.

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