The listed real estate investment trust (REIT) ESR Kendall Square REIT is experiencing weakness in early trading on the 12th following news of a shareholder allocation capital increase.
Shares of ESR Kendall Square REIT traded at 4,665 won on the KOSPI market at 9:12 a.m. on that day. The stock price fell by 3.72% (180 won) compared to the previous day.
ESR Kendall Square REIT announced a plan to conduct a capital increase by issuing new shares at 4,575 won each to raise 150 billion won. The proceeds will be used to incorporate the Cheonan logistics center as an asset and pay off revolving credit facilities.
This capital increase will result in an approximate 15% increase in the number of shares of ESR Kendall Square REIT compared to before. While it is not an insignificant amount, it is considered a cautious scale compared to the previous year's capital increases of around 1 trillion won, which caused a slowdown in the REIT market.
Lee Kyung-ja, Head of Team at Samsung Securities, noted that 'ESR Kendall Square REIT is expected to maintain a dividend estimate of 137 to 138 won per share despite the increase in the number of shares,' adding, 'Since 2022, amid rising interest rates, ESR Kendall Square REIT has shown a slight increase in dividends per share (DPS).'
The head of team also noted, 'The logistics center market has faced a difficult period due to past oversupply and rapid interest rate hikes,' but emphasized that 'ESR Kendall Square REIT has unique advantages, such as over 50% of its tenants being Coupang, providing stability.'