Hanwha Asset Management to raise PLUS K-Reit ETF distributions for 4 months

Hanwha Asset Management announced Thursday that its PLUS K-Reit ETF will pay elevated distributions over four months.

The ETF's distributions will be adjusted to approximately 2 percent per month for a total of four payments from September through December.

Customers who held the PLUS K-Reit ETF as of Wednesday will receive 131 won per unit on Friday. That represents about 2.13 percent of the closing price on Monday, the day before the ex-distribution date.

The source of the increased distributions is proceeds from the sale of the Hana Securities Building by Koramco THE ONE Reit, which the ETF holds as an underlying asset. Koramco THE ONE Reit completed the sale in June and announced a special dividend of 8,900 won per unit funded by the sale gains, representing a dividend yield of approximately 81.4 percent.

The Hana Securities Building, located in Yeouido, Seoul, has a total floor area of 69,826 square meters across 23 above-ground floors and five below-ground floors, with a site area of 7,570 square meters. Following the sale, Koramco THE ONE Reit is proceeding with liquidation rather than reinvesting in new assets.

The PLUS K-Reit ETF allows investors to receive separate taxation benefits even through regular brokerage accounts. Under the current Restriction of Special Taxation Act, investors who meet the requirements and apply for separate taxation are subject to a 9.9 percent rate — including local income tax — on dividend income generated over three years from the date of investment, up to a total investment ceiling of 50 million won ($36,900).

Dividend income taxed under this separate scheme is also excluded from the aggregate income tax base used to calculate comprehensive financial income taxation.

"The PLUS K-Reit ETF is a tax-efficient product that offers separate taxation benefits even in regular accounts," said Kim Jeong-seop, head of Hanwha Asset Management's ETF business division. "Because dividend income from the ETF for investors who apply for separate taxation is not included in comprehensive income and is taxed at a flat 9.9 percent rate, investors with substantial financial income can use it as a tool for asset allocation."