REITs Introduction
Together with LOTTE, REITs become special.
highlights
Key highlights of LOTTE REIT
- Attractive Korean public REIT market with high growth potential
- We believe that the public REIT market in Korean real estate space will exhibit resilient growth on the back of Korean government’s policy initiatives to support the growth of public REITs.
- With continuing low interest rate environment and increase in retired population, we believe that the retail investor demand for public REIT products offering a stable dividend yield will continue to expand.
- Largest public REIT in Korea with attractive dividend yield
- LOTTE REIT is a leading public REIT of significant scale with the AUM of 1.5 Korean trillion won. LOTTE REIT plans to offer attractive dividend yield to investors based on the stable rental income from LOTTE Shopping, which possesses a strong credit rating and best-in-class retail expertise.
- Sponsor – leading retailer in Korea
- LOTTE Shopping, the sponsor and anchor tenant of LOTTE REIT, is a leading retailer in Korea which operates diversified retail channels including department stores, discount stores, outlets, supermarkets and online malls.
- LOTTE Shopping will maintain a 50% stake in LOTTE REIT after the IPO and fully commit to enhancing the value of LOTTE REIT asset portfolio based on the alignment of interest with IPO investors.
- Prime retail assets in core commercial districts
- The retail properties within LOTTE REIT asset portfolio are located in core commercial districts with high daily foot-traffic and well established public transportation. We believe that the properties are well-positioned for consistent asset value appreciation based on their prime locations.
- Establishment of long-term growth momentum
- LOTTE REIT owns the right of first offer for approximately 80 remaining stores fully owned by LOTTE Shopping. With the ROFO, LOTTE REIT has established the long-term growth roadmap to inject additional assets, expand the AUM and become a leading public retail REIT in the global market.
- Attractive debt funding cost based on superior credit rating
- In July 2019, LOTTE REIT has received a credit rating of AA- (Stable) for the first time in Korean REIT history and subsequently issued 170 billion Korean Won principal amount of secured bonds.
- Through the bond issuance and secured borrowings with competitive interest rates, LOTTE REIT has secured a more attractive debt financing cost compared to other public REITs, which may lead to a stable increase in the dividend yield going forward.
- Robust Sponsor Commitment with Governance Transparency
- LOTTE REIT, in addition to LOTTE AMC which will act as a corporate director, plans to have two external professionals acting as supervisory directors in order to ensure a transparent board structure.
- Furthermore, a well-defined regulatory framework will be in place to ensure that investors participate in the management of LOTTE REIT. Pursuant to the Real Estate Investment Company Act, key decisions of the REIT shall obtain approval from the meeting of shareholders.