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‘Korean listed REITs are undervalued amid bio, tech rallies’

Kim Dae-hyung, president of Korea Association of Real Estate Investment Trusts, speaks at a media event in Seoul, Wednesday. (Yonhap)
Kim Dae-hyung, president of Korea Association of Real Estate Investment Trusts, speaks at a media event in Seoul, Wednesday. (Yonhap)

Despite a number of REITs attempting to make their market debuts on the nation’s main bourse Kospi in the second half, their value remains underestimated, according to the chief of the Korea Association of Real Estate Investment Trusts on Wednesday.

“Beginning with IGIS Value Plus REIT’s list on the Kospi in July, 10 REITs have either been listed or waiting to be listed in the market in the second half. Unlike our expectation, nominal values of the REITs were underestimated,” KAREIT President Kim Dae-hyung said.

The local stock market has seen the rise of bio- and information technology-related companies, such as SK Biopharmaceutical, and their value growing on investors’ expectations of a major industrial transition in the post-COVID era. The REIT industry is concerned of not being able to grab attention from investors, while upcoming IPOs by big-name firms such as Big Hit Entertainment and Kakao Games are already heating up the market.

“It is surely unfortunate, however, we hope the upcoming (REIT) IPOs can pull up the current undervalued market. We hope for the second half of this year to be the year for local REITs to be positioned in the market,” Kim said.

“To accelerate the REIT IPOs, we will actively cooperate with government agencies such as the Ministry of Land, Infrastructure and Transport, the Korea Exchange and the Financial Services Commission.”

According to the KRX, share prices of the REITs that were listed last year, had fallen over 10 percent from their initial values.

IGIS Value Plus REIT, the first REIT of the year, began trading at 5,000 won ($4.20) per share on the first day of going public, but the price also had fallen to 4,465 won per share as of Wednesday.

Seoul-based property investment house Mastern Investment Management delayed its first REIT IPO’s investor subscriptions amid dampened REITs market sentiments.

By Jie Ye-eun (yeeun@heraldcorp.com)
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