Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

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<p><strong>SK REIT is one of the most attractive REITs in Korea so far in 2021. As such, we have a positive view of this IPO and would subscribe to this deal. </strong></p>
<p>SK REIT will be the REIT vehicle of the SK Group. Over the next 5-10 years, SK REIT has the potential to grow its assets to about 5-10 trillion won, in our view. SK REIT currently has two major properties including SK Seorin building and 116 gas stations which are very stable and have SK Group companies as tenants. The annual dividend yield is 5.4% which we think is quite achievable. </p>
<div>SK REIT has the right to negotiate the preferred purchase of core real estate assets held by SK Group. <span>If all assets subject to preferred purchase negotiation rights held by SK REIT are incorporated, it is expected that the total amount of assets will be approximately 4 trillion won by 2024. </span><span>In addition, SK REIT plans to expand into SK Group's core business-related assets such as data centers, new energy, logistics centers, and overseas assets which could be included in its REIT portfolio.</span>
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</div><div>SK REIT IPO is expected to be completed in September. The expected IPO price per share is 5,000 won and there are 46.5 million shares offered in the IPO. The IPO deal size is about $200 million. The institutional investors will be allotted about 70% and retail will account for the rest. The book building for the institutional investors starts on 23 August. Expected market cap after the IPO is 775 billion won. Korea Investment &amp; Securities, Samsung Securities, and SK Securities are the major bankers in this deal. </div><table class="table table-striped">
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<tr><td colspan="2" style="width: 518pt;"><div>Deal Specifics of the SK REIT IPO:</div></td></tr>
<tr>
<td>Lead underwriters of the IPO: </td>
<td style="width: 260pt;">Korea Investment &amp; Securities, Samsung Securities, SK Securities</td>
</tr>
<tr>
<td>Expected IPO price per share: </td>
<td style="width: 260pt;">5,000 won (low)/5,000 won (high)</td>
</tr>
<tr>
<td>Number of Shares for IPO:</td>
<td style="width: 260pt;">46.5mn </td>
</tr>
<tr>
<td>IPO base deal size: </td>
<td style="width: 260pt;">US$200mn</td>
</tr>
<tr>
<td>Expected common shares outstanding, fully diluted (post-IPO):  </td>
<td style="width: 260pt;">155mn shares</td>
</tr>
<tr>
<td>Expected market cap after IPO:</td>
<td style="width: 260pt;">775 billion won</td>
</tr>
<tr>
<td>Book open: </td>
<td style="text-align: left; width: 260pt;">23-Aug-21</td>
</tr>
<tr>
<td>Book closed:</td>
<td style="text-align: left; width: 260pt;">24-Aug-21</td>
</tr>
<tr>
<td>Listing date: </td>
<td style="text-align: left; width: 260pt;">TBD</td>
</tr>
<tr>
<td>Source: Company data</td>
<td> </td>
</tr>
</tbody>
</table>


SK REIT is one of the most attractive REITs in Korea so far in 2021. As such, we have a positive view of this IPO and would subscribe to this deal. 
SK REIT will be the REIT vehicle of the SK Group. Over the next 5-10 years, SK REIT has the potential to grow its assets to about 5-10 trillion won, in our view. SK REIT currently has two major properties including SK Seorin building and 116 gas stations which are very stable and have SK Group companies as tenants. The annual dividend yield is 5.4% which we think is quite achievable. 
SK REIT has the right to negotiate the preferred purchase of core real estate assets held by SK Group. If all assets subject to preferred purchase negotiation rights held by SK REIT are incorporated, it is expected that the total amount of assets will be approximately 4 trillion won by 2024. In addition, SK REIT plans to expand into SK Group's core business-related assets such as data centers, new energy, logistics centers, and overseas assets which could be included in its REIT portfolio.


SK REIT IPO is expected to be completed in September. The expected IPO price per share is 5,000 won and there are 46.5 million shares offered in the IPO. The IPO deal size is about $200 million. The institutional investors will be allotted about 70% and retail will account for the rest. The book building for the institutional investors starts on 23 August. Expected market cap after the IPO is 775 billion won. Korea Investment &amp; Securities, Samsung Securities, and SK Securities are the major bankers in this deal. 





Deal Specifics of the SK REIT IPO:

Lead underwriters of the IPO: 
Korea Investment &amp; Securities, Samsung Securities, SK Securities


Expected IPO price per share: 
5,000 won (low)/5,000 won (high)


Number of Shares for IPO:
46.5mn 


IPO base deal size: 
US$200mn


Expected common shares outstanding, fully diluted (post-IPO):  
155mn shares


Expected market cap after IPO:
775 billion won


Book open: 
23-Aug-21


Book closed:
24-Aug-21


Listing date: 
TBD


Source: Company data
 




SK REIT IPO - Benchmarking Singapore's Ascendas REIT

South Korea

SK REITs Co., Ltd. operates real estate investment trust. The Company conducts real estate investment management business. SK REITs provides services in Korea.

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SK REITs (395400 KS)

SK REIT IPO - Benchmarking Singapore's Ascendas REIT

SK REIT is one of the most attractive REITs in Korea so far in 2021. As such, we have a positive view of this IPO and would subscribe to this...

Douglas Kim

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