JR AMC to list first cross-border REIT on Kospi

South Korean firm JR Asset Management said Tuesday it is eyeing its first cross-border real estate investment trust to list on the nation’s main bourse Kospi in early August.

JR Global REIT is designed to invest in Belgium’s second-tallest skyscraper Finance Tower Complex. Located in Brussel’s central business district, the 36-story building was valued at 1.44 billion euros ($1.29 billion) as of June 21, JR AMC President and CEO Kim Kwan-young said in a press briefing.

“The building is located downtown where the country’s federal government, the European Union’s institutions and financial firms are clustered. It also has the country’s major government departments as leaseholders such as the Federal Public Service Finance, Federal Public Service and the Federal Agency for the Safety of the Food Chain until 2034.”

Through the initial public offering, JR Global intends to collect funds from retail investors to buy securities of its private REIT -- JR Fund No. 26. It will add more prime properties in Europe to its portfolio by 2022 and diversify the portfolio with the funds in the US starting 2025, Kim explained.

Of the total amount worth 828 billion won to buy Belgium’s second-tallest building, JR Global previously raised 343 billion won via pre-IPO proceeds. By issuing 97 million new common shares at 5,000 won ($4.14), the REIT is looking to raise up to 485 billion won.

Institutional investors’ subscriptions for JR Global REIT are poised to take place from Thursday to Friday. Retail investor subscriptions will be accepted July 22-24. KB Securities and Meritz Securities are lead underwriters, while Daishin Securities is also taking part in the IPO deal.

To guarantee small retail investors’ investment opportunity, JR Global introduced the new subscription allocation method. Twenty-four million new shares will be allocated to retail investors and those with less than 1 million won of subscription money will be preferentially allocated applicants.

“While preparing for the IPO, we’ve been seeking for realistic and effective ways to provide various investors chances for investments,” Kim said. “We hope our new allocation measure could increase accessibility for the local retail investors.”

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