SK Reit: Model Fair Value Estimate Rises to ₩1,491 per Share After Discount Rate Change

What happened

No new company filing drove this update. The event is a change in our model output dated 2026-10-22. The base estimate moved from ₩480 to ₩1,491 per share, a rise of 211.0%. The bull case fell from ₩16,105 to ₩4,086, and the bear case stayed at ₩0. The discount rate in the model rose from 4.0% to 6.2%, still on a FY 2025 basis. The financial data are unchanged: revenue of ₩70.4B, net income of ₩32.4B, and borrowings of ₩1.0T in the latest data. No minor background events were flagged, and no filing excerpts were provided for this change. The data do not say why the model's other assumptions changed, so the exact drivers of the base-case move are not available.

What it changes for the thesis

The previous report described a growing real estate company with a 91.7% operating margin, but with a short earnings record, low ROE of 2.1%, and heavy debt. None of that changes. The FY 2025 figures are the same, and ROE and the margin are as before. The report also said the model estimate was very sensitive to assumptions. This update confirms that: the base case tripled and the bull case shrank by about three quarters. The data in the pack show liabilities at 168.9% of equity. Foreign ownership is 8.4%, up from 8.1% sixty days ago, and the short balance is 0.4%. Those figures are small and do not change the earlier picture.

What it changes for the valuation

The model (5-year discounted cash flow, discount rate 6.2%, FY 2025 basis) now gives a base estimate of ₩1,491 per share, with a bear case of ₩0 and a bull case of ₩4,086. The previous report had ₩480, ₩0 and ₩16,105. This is a model estimate based on the assumptions shown, not a target or a reason to buy or sell. The share price is ₩5,250, so even the bull case is below it, and the base case is about 71.6% below it. Current multiples are a P/E of 48.8, a P/B of 0.8, a P/S of 22.5 and a dividend yield of 1.3%. Peer figures are now available: P/E ranges from 59.1 (Lotte Reit) to 1,217.6 (ESR Kendall Square Reit), and P/B from 0.7 to 1.4. SK Reit's P/B of 0.8 is at the lower end of that range, while its P/E is below all five listed peers. The very wide spread of peer P/E figures limits what this comparison shows.

Closing view

The update changes the model figures, not the company's reported results. A higher base estimate and a lower bull case narrow the range somewhat, but both still sit far from the market price, and the bear case remains ₩0. This shows how sensitive the result is to inputs for a company with large borrowings. Against that, the shares trade below book value and at a lower earnings multiple than the listed peers shown. The evidence remains mixed, and this note makes no recommendation.

Model estimate of fair value

Bear

₩0

-100%

Base

₩1,491

-72%

Bull

₩4,086

-23%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Base case of the 5-year discounted cash flow model on the stock's Valuation tab (statements FY 2025; discount rate 6.2%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

• Insider shareholding reportOct 15, 2026
• Investor relations (IR) eventOct 13, 2026
• Insider shareholding reportOct 8, 2026
• 5%+ holding reportOct 2, 2026
• Real Estate Investment Company Borrowing of FundsOct 1, 2026
• Insider shareholding reportOct 1, 2026
• Insider shareholding reportSep 23, 2026
• Securities Issuance Results ReportSep 22, 2026
• ProspectusSep 22, 2026
• [Amended Filing] Real Estate Investment Company Borrowing of FundsSep 21, 2026
• Terms set: Securities registration statementSep 21, 2026
• Annual general meeting resultsSep 17, 2026
• [Today's IR] SK REIT, Samyang Comtech, Myungshin Industries and OthersOct 13, 2026
• Daily prices up to 2026-10-20
• Financial statements, trailing 12 months as of FY 2025
• Our fair value model, statements as of FY 2025

Report history

1. Oct 21, 2026Update noteModel fair value changeSK Reit: Model Fair Value Estimate Rises to ₩1,491 per Share After Discount Rate Change
2. Oct 13, 2026InitiationStart of coverage (300 largest)SK Reit: Rising Revenue and Profit From a Low Base, Heavy Borrowings, and a Model Estimate Far Below the Share Price