REITs’ Foreign Property Investments Backfired: FX Hedging Contracts Turned into Billion-Won Debt Due to Won’s Plunge
For years, institutional and retail investors viewed overseas real estate investment trusts (REITs) as a sophisticated way to diversify portfolios and secure stable dividends from prime global assets. The strategy seemed foolproof: acquire “Class A” properties in stable capitals, lease them to creditworthy governments or corporations, and use currency hedging to neutralize the volatility of … Read more