ESR KendallSquare REIT (hereinafter referred to as "the REIT"), part of the ESR Group, has announced the sale of its owned logistics centre, "Icheon LP 1" (Kendall Square Professional Investment Real Estate Trust No. 6) for 81 billion KRW. This has resulted in a significant total return of c.30% including dividends paid from the trust.

The property is situated at 452 Hoeok-ri, Majang-myeon, Icheon-si, Gyeonggi-do, and is a cutting-edge logistics center encompassing a total floor area of approximately 15,000 pyeong (1 pyeong is approximately 3.3 square meters). The REIT initially acquired the asset for 66 billion KRW during its initial public offering in December 2020.

Despite concerns regarding possible declines in real estate prices resulting from rising interest rates and the aftermath of the COVID-19 pandemic, the REIT has showcased its resilience and profitability by executing the successful sale of its logistics asset at a highly competitive cap rate of 4.0% in the market. This achievement effectively allays any fears surrounding the depreciation of logistics real estate assets and provides clear evidence of the overall high value inherent in the REIT's portfolio.

Sanghwoi Bae, CEO of ESR KendallSquare REIT, said: “We are proud that ESR KendallSquare REIT has achieved this milestone divestment to deliver significant returns for our investors. This will enable us to take advantage of increasingly more attractive pipeline opportunities in South Korea and build on the strength of our platform to deliver long-term sustainable growth.”

ESR KendallSquare REIT is the only listed Korean REIT in 2023 that has witnessed the National Pension Service (NPS) increasing its ownership over 5% level.

ESR KendallSquare REIT recaps logistics asset in S. Korea