SPH Prices REIT IPO at S$0.90 per Unit

SPH Prices REIT IPO at S$0.90 per Unit
by Admin on Jul 17, 2013 • 7:01 pm

by Ernie B. Calucag

Media group Singapore Press Holdings (SPH) has priced Wednesday its real estate investment trust (REIT) offering at S$0.90 per unit, at the top end of an indicative range of S$0.85-S$0.90 per unit.

SPH said the final price was settled after seeing strong institutional investor response during the bookbuilding process, amounting to approximately 42 times the number of units offered under the placement tranche.

The media group is expected to raise S$504.0 million on offering of 308.9 million units to institutional and public investors, and 251 million units to cornerstone investors such as Great Eastern Life Assurance Company, Hong Leong Asset Management and Morgan Stanley Investment Management Company.

At S$0.90 per unit, SPH REIT offers a yield of 5.58 per cent and 5.79 per cent for the forecast period 2H2013 and projection year 2014, respectively.

The SPH REIT’s assets will include the luxury Paragon mall in the prime shopping district of Orchard Road and the suburban Clementi Mall.

Paragon and Clementi Mall are valued at S$2.5 billion and S$570.5 million respectively by Knight Frank in February.

The retail tranche for the IPO opens on Wednesday and the listing will be on July 24.

Upon listing of SPH REIT, SPH will remain the single largest unitholder, with approximately 70 per cent stake. The group also plans to distribute a special dividend of S$0.18 to shareholders after the listing.

“The manager will take an active role in managing and enhancing SPH REIT’s properties,” SPH REIT said in the prospectus, adding that it will “assess acquisition opportunities in line with SPH REIT’s investment objective.”

Credit Suisse, DBS and Oversea-Chinese Banking Corp are joint bookrunners for SPH REIT, while CIMB and Nomura are co-lead managers.

More REIT IPOs

Another REIT offering is expected to be finalised in the days to come. Last week, Singapore property firm Overseas Union Enterprise Ltd (OUE) lodged its preliminary prospectus seeking to raise up to S$614.0 million.

According to the prospectus, OUE Hospitality Trust will offer 434,598,000 staple securities to the public and institutions. The offer includes 51.1 million staple securities for the retail investors while another 247,220,000 will go to cornerstone investors.

The listing will hope to raise up to S$614.0 million with an offer price expected to be between 88 S-cents and 90 S-cents per stapled security.

The trust will comprise a real estate investment trust and a business trust. OUE said it will initially inject two assets in the trust- the Mandarin Orchard hotel and the Mandarin Gallery mall along Orchard Road.

REITs raised S$3.4 billion or 68 per cent of the S$5.0 billion of stock sold in Singapore IPOs in the past 12 months, according to data compiled by Bloomberg.

The biggest share sale was the S$1.6 billion raised by Mapletree Greater China Commercial Trust, a REIT that owns assets including the Festival Walk shopping mall in Hong Kong and an office complex in Beijing.

The citystate lists 23 REITs and is the largest REIT market in Asia ex-Japan. Singapore-listed REITs have a combined market capitalisation of S$52.0 billion. Together the 23 REITs provide a diverse mix of local and international property assets that house industrial, commercial, retail, residential and specialised tenants.








More good news coming?


- wong chee tat :)