Hana Office REIT (Hana Office Entrusted Real Estate Investment Company) has completed its restructuring by securing 65 billion won in investment funds. In March, Hana Office REIT suddenly withdrew its IPO (initial public offering) plan. Consequently, the market speculated that the company might sell Taegwang Tower to secure liquidity, but this new round of investment has dispelled such rumors.
According to the REIT industry on the 3rd, it is understood that Hana Office REIT recently received investments of 15 billion won from NH Prime REIT and 50 billion won from the Science and Technology Personnel Mutual Aid Association. With recent capital contributions completed, some short-term investment funds have been converted into long-term investment funds.
NH Prime REIT acquired preferred shares of Hana Office REIT with 15 billion won out of the 41 billion won principal recovered from its Seoul Square investment. According to NH Prime REIT, the dividend rate for Hana Office REIT is in the 6th% range.
The Science and Technology Personnel Mutual Aid Association is the second public fund investor after the Administrative Mutual Aid Association, based on the prospectus released in February. Previously, the Administrative Mutual Aid Association invested 19.6 billion won in Hana Office REIT's Series 1 and Series 2 preferred shares. The investment from the Science and Technology Personnel Mutual Aid Association exceeds twice the amount of the prior public fund investments.
With the completion of capital contributions, Hana Office REIT has finished its rights offering (paid-in capital increase) and capital reduction. The scale of the capital reduction totals 112.5 billion won based on the invested principal. Existing investors, including affiliates of the Hana Financial Group such as Hana Securities, Hana Life Insurance, Hana Asset Trust, Hana Capital, and Hana Savings Bank, have partially exited their investments.
Hana Office REIT had aimed to list on the KOSPI by April but suddenly withdrew the plan. The company intended to raise 126 billion won through the IPO. As a result, it is reported that the asset management entrustment contract with Hana Asset Trust, its asset management company (AMC), was modified to revise the fee and performance-based compensation system. Based on this revised fee structure, it appears that payments of fees to Hana Asset Trust have now been completed. Some observers predicted that liquidity would worsen for Hana Office REIT after the cancellation of a 120 billion won fundraising plan through public offering. Consequently, speculation arose that Taegwang Tower might be sold among the underlying assets, which include the Hana Financial Gangnam Office Building and Taegwang Tower. However, according to Money Today's investigation, it is understood that Hana Asset Trust has not discussed selling Taegwang Tower.
A REIT industry official stated, "Hana Office REIT recently completed its restructuring by converting short-term investment funds into long-term investment funds." The official added, "Although there were concerns about liquidity, the appraisal values of the Hana Financial Gangnam Tower and Taegwang Tower increased by 50 billion won and 30 billion won, respectively. Institutional investors flocked to invest, and the process concluded smoothly."
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