[Edaily Marketin KIM SUNG-SOO Reporter] A real estate fund managed by Aegis Asset Management that invested in Daehak-ro CGV has extended the maturity of a 41 billion won loan by one year.

CGV, the only movie theater in Daehak-ro, continues to maintain its presence as a key attraction in the commercial district. The company is continuing its asset management based on the competitive location of the Daehak-ro commercial district—where demand from performance and cultural venues intersects with that of the university area—as well as its solid rental and operational foundation.

However, as the lease agreement is set to expire next June, Aegis Asset Management is simultaneously working to attract a successor tenant and conducting ongoing marketing efforts for a potential sale.

Real Estate-Secured Loan Maturity ‘Extended by One Year’ to October 18 of Next Year

According to the financial investment industry on the 30th

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“Aegis Retail Real Estate Investment Trust No. 299” (hereinafter “Aegis 299”), managed by Aegis Asset Management, signed an amendment to the loan agreement on the 16th regarding its existing senior and subordinated borrowings.

Accordingly, the loan maturity date has been adjusted to October 18 of next year, a one-year extension from the original date. The loan amount and terms remain unchanged.

MetLife Life Insurance participates as the senior lender and SBI Savings Bank as the subordinated lender, with total borrowings amounting to 41 billion won. Of this amount, the senior loan is 38 billion won and the subordinated loan is 3 billion won. Interest rates also remain fixed at 5.0% per annum for the senior loan and 8.5% per annum for the subordinated loan.

Aegis Fund No. 299 is an investment product targeting “Daehak-ro CGV,” located at 28 Daemyeong-gil, Jongno-gu, Seoul. The fund is structured to generate returns through rental operations and to pursue capital gains from the future sale of the asset. With this maturity extension, the fund has secured the time to continue managing the asset while maintaining its existing loan terms.

Daehak-ro CGV’s competitive edge stems from its location. The Daehak-ro area is densely populated with universities such as Sungkyunkwan University and The Catholic University of Korea, as well as various theaters, performance venues, and franchise retail facilities. In particular, it is recognized as one of Seoul’s major cultural and commercial districts with a large floating population of people in their teens and twenties. The fact that it is the only movie theater within the Daehak-ro commercial district is another key differentiator.

CGV Daehak-ro is located in Commercial Zone B, which is considered a prime location even within the Daehak-ro commercial district. It is evaluated as having strong customer draw due to the vibrant alleyway commercial area between Daemyeong-gil and Sonamu-gil. This location combines not only demand for movie-going but also Daehak-ro’s unique mix of performing arts, dining, and cultural consumption.

It also has a secure lease-based operating foundation. A guaranteed lease agreement for this asset is in place through June 27 of next year. With this loan maturity extension, attention is focused on whether the property can continue stable operations based on its existing lease structure.

Lease agreement expires next June… Attracting a new tenant is a ‘challenge’

However, the loan maturity extension does not necessarily mean the asset will be sold or that the fund’s profitability will improve. Future operating performance is expected to be influenced by leasing results, the recovery trend of the commercial district, and conditions surrounding the asset’s sale.

First and foremost, a new tenant must be secured. The current tenant has notified the fund that it will not invoke the lease agreement’s five-year automatic renewal clause, and the lease will terminate upon its expiration on June 27 of next year.

Aegis Fund No. 299 must finalize the amount of the security deposit to be returned no later than three business days before the termination of the guaranteed lease agreement and, within 10 business days of the confirmation date, use the remaining funds—after deducting the security deposit, operating expenses, and loan interest from its cash reserves—to make an early repayment of the senior loan principal.

Furthermore, the sale of the asset has not yet been finalized. To minimize losses for fund investors by expediting the sale of the asset, Aegis No. 299 has conducted aggressive marketing efforts on four separate occasions from 2022 through this year.

Since the COVID-19 pandemic, uncertainty surrounding retail assets such as movie theaters has increased, and rising market interest rates have dampened the real estate market’s sentiment.

A representative of Aegis Fund No. 299 emphasized, “We will continue to attempt to renegotiate lease extensions with the tenant,” adding, “At the same time, we will simultaneously pursue attracting new tenants and ongoing sales marketing to do our utmost to enhance asset value and protect investors’ rights.”