UPDATE 1-Temasek-backed Mapletree raises $1.3bln pricing IPO at top end-sources
* Mapletree REIT set to start trading on March 7
* Benchmark Singapore index up about 11 pct in three months
* Mapletree projecting yield as high as 6 percent for FY2014 (Adds details on Mapletree)
By Kevin Lim and Denny Thomas
SINGAPORE/HONG KONG, Feb 26 (Reuters) - A real estate investment trust backed by Temasek Holdings Pvt Ltd raised $1.3 billion through its Singapore IPO, selling shares at the top of a marketing range and becoming the city-state's largest REIT offering.
Mapletree Greater China Commercial Trust is set to be the biggest Asia ex-Japan IPO s November 2012. The REIT is backed by retail developments in mainland China and Festival Walk, an up-market shopping center in Hong Kong's Kowloon district.
Mapletree's top-end pricing of the IPO takes equity capital market deals in Singapore to nearly $2.6 billion in two consecutive days. On Monday, Singapore sovereign wealth fund GIC raised $1.25 billion by cutting its stake in warehouse operator Global Logistic Properties.
Mapletree will use the proceeds from the offer to fund the purchase of Festival Walk and Gateway Plaza from its parent company.
Festival Walk is focused mostly on retail commercial space, with tenants including Marks & Spencer, budget fashion company Hennes & Mauritz and an Apple Inc store, but it also has a four-storey office tower. Mapletree's Gateway Plaza in Beijing targets mostly corporate tenants with two 25-storey office towers.
REITs are attractive to investors looking for steady income streams and Mapletree's case was bolstered by quality assets and success with previous offerings, analysts said.
The units were finally priced at S$0.93 each after being marketed in the S$0.88 to S$0.93 range, one person briefed on the matter told Reuters.
The offer generated strong demand from Asian investors, a second person familiar with the process said. With a projected yield of as high as 6 percent for the financial year ending in March 2014, the offer drew yield-hungry investors.
The sources were not authorised to speak to media ahead of the official pricing announcement, which is expected on Wednesday.
The projected returns compare with an average of 5.05 percent on retail REITs and 4.82 percent for office REITs listed in Singapore for the 12 months through the end of January, according to Asia Pacific Real Estate Association (APREA) data. In Hong Kong, retail REITs posted average yield of 4.6 percent, while office REITs had 5.46 percent in the same period.
The IPO is set to debut in Singapore on March 7.
MORE REITS TO COME
Strong demand for Mapletree's offer bodes well for other REITs waiting to hit the market. These include an up to $700 million IPO for GE Commercial Aviation Services' Aircraft Capital Trust and an up to $600 million deal by Japan-focused retail real estate company Croesus Retail Trust, sources previously told Reuters.
Share offerings in Asia are off to a strong start this year, recovering from last year's dismal showing. Total equity capital market deals in Asia ex-Japan so far in 2013 total $26.2 billion, nearly double same time year. IPO volumes, including Mapletree, would total about $2.9 billion, slightly more than last year's tally for the comparable period.
Asian investors have been warming up to REITs with fund-raising in Asia climbing 21 percent to $9.64 billion in 2012 from $7.97 billion in 2011, according to the APREA data.
In contrast, IPOs in Hong Kong plunged 64 percent in 2012 from 2011, while new listings in Singapore fell 41 percent over the same period, according to Thomson Reuters data.
The Mapletree IPO is the biggest in Asia since Chinese state-owned insurer, People's Insurance Company (Group) of China's (PICC) raised $3.1 billion on Nov. 30.
A rally in the past three months in Asian stock markets has also underpinned recent IPOs. The Singapore benchmark share index has gained 10.5 percent since mid-November.
Citigroup, DBS, Goldman Sachs and HSBC were hired to manage the offer.
(Reporting by Kevin Lim and Denny Thomas; Editing by Matt Driskill and Michael Flaherty)
- Cortege departs to take Mandela's body to lie in state |
- U.S. Mega Millions lottery up to $400 million, 2nd-biggest ever
- Uruguay becomes first country to legalize marijuana trade
- UPDATE 2-U.S. Mega Millions lottery up to $400 million, 2nd-biggest ever
- U.S. budget deal could usher in new era of cooperation