Emerging markets sell-off may delay $1 bln Lotte real estate IPO

SINGAPORE Tue Feb 4, 2014 11:10pm EST

SINGAPORE Feb 5 (Reuters) - Lotte Shopping Co Ltd , South Korea's biggest shopping mall owner, will decide this week whether to start marketing a $1 billion real estate investment trust or delay it due to the sell-off in emerging markets, people with knowledge of the matter said on Wednesday.

If Lotte Shopping decides to launch the mall REIT, the marketing process could start as early as Monday. The company already has the approval of the Singapore Stock Exchange to list the REIT, the sources said.

"The markets are quite challenging," said a person with direct knowledge of the deal. "We are waiting for the right window."

A Lotte spokesman in Seoul declined to comment on the timing for the REIT. The sources also declined to be identified because the details of the IPO were not yet public.

Concerns about economic growth in China and other emerging markets have triggered a sell-off in riskier assets as investor appetite for emerging markets wanes.

The uncertainty over the Lotte IPO launch also follows the poor debuts of other Asian offerings.

HK Electric Investments Ltd, a trust spun out of Li Ka-shing's business empire, fell 2 percent on the first day of trading last week as Hong Kong investors spurned a safe-haven utility ahead of juicier growth stocks set to come to market later this year.

Singapore's latest REIT IPO, OUE Commercial Real Estate Investment Trust, is also currently trading below its launch price.

The Lotte REIT would be the biggest IPO in Singapore since February 2013 when Mapletree Greater China Commercial Trust raised $1.3 billion through a REIT.

DBS, Goldman Sachs, Nomura and Standard Chartered have been hired to manage the Lotte REIT IPO.

The initial portfolio is likely to consist solely of Korean properties. (Reporting by Daniel Stanton and Saeed Azhar in SINGAPORE and Joyce Lee in SEOUL; Editing by Miral Fahmy)