By Elzio Barreto
HONG KONG, April 25 Japan-focused Croesus Retail
Trust (CRT) launched a $292 million Singapore IPO on Thursday,
looking to benefit from demand for high-yield securities and an
expected increase in consumer spending in the world's
The deal comes as a surge in demand for real estate
investment trusts (REITs) pushed Singapore's REIT index to an
all-time high last week. It also looks to capitalize on renewed
optimism over Japan's economy on the back of Prime Minister
Shinzo Abe's aggressive fiscal and monetary expansion campaign.
Japan's consumer confidence index hit its highest in more
than five years in February and many analysts see that as a sign
that the economy is recovering.
CRT, which owns four shopping malls in Japan, is offering
391.1 million units at a price of S$0.93 each, putting the total
deal at S$363.7 million ($292.4 million), said a source with
direct knowledge of the plans, who was not authorized to speak
publicly on the matter.
The trust, which is part-owned by Marubeni Corp.
and Daiwa House Industry Co. Ltd., had originally
planned to go public last year with a $650 million deal, but
decided to postpone the IPO to 2013 after initial meetings with
The offering comes on the heels of the largest-ever REIT IPO
in Singapore, the $1.3 billion listing in February by
Temasek-backed Mapletree Greater China Commercial Trust
. It also follows a 35 percent surge in the FTSE
Straits Times REIT index as investors flocked to
the high-yielding securities to boost returns amid low global
interest rates and volatile stock markets.
CRT forecast a yield of 8 percent for the financial year
ending June 30, 2013 and 8.1 percent the following year,
according to the IPO prospectus.
The projected returns compare with an average of 5 percent
on retail REITs in Singapore for the 12 months through the end
of March and a 5.2 percent 2013 forecast yield for the country's
largest REIT, CapitaMall Trust, according to Asia
Pacific Real Estate Association (APREA) data. In Japan, retail
REITs posted an average yield of 3.9 percent through March.
REIT listings in Asia rose 21 percent to $9.64 billion in
2012 from $7.97 billion in 2011, according to APREA. Other
offerings by business trusts and REITs expected in the coming
months in Singapore include a $1 billion offering by Asian Pay
Television Trust, an up to $700 million IPO for GE Commercial
Aviation Services' Aircraft Capital Trust and India's Mytrah
Energy's up to $400 million listing.
Cornerstone investors including fund managers Eastpring
Investments and Myriad Asset Management, as well as hedge funds
D.E. Shaw and Citadel, agreed to buy $122 million worth of the
units, according to the prospectus.
Citigroup and DBS Group Holdings are
managing the deal.