(Adds details, background, comments)
By Rujun Shen and Saeed Azhar
SINGAPORE, July 17 A Chinese tycoon plans to buy
about 60 percent of the initial public offering of IREIT Global,
a Singapore real estate investment trust that will invest in
European properties, in his latest push to ramp up REIT
investment in Singapore.
Rich Chinese investors have become increasingly interested
in Singapore's REITs, admiring their stable returns and seeking
alternatives to park their wealth, while the Chinese property
market, where many of them have made their fortunes, remains
Tong Jinquan, a self-made property tycoon ranked by Forbes
as China's 35th richest man, plans to buy 254 million of the 423
million units in the IPO, which are being offered at S$0.88 a
unit, according to the prospectus filed on Wednesday evening.
The IPO aims at raise about S$372 million ($299 million).
"Chinese investors have been key buyers of properties in
Singapore in the past. Now the property outlook is softening,
and they are exploring other asset classes, including REITs,"
said Vikrant Pandey, an analyst at brokerage UOB Kay Hian.
The 15 percent stamp duty the Singaporean government imposes
on foreign buyers of properties also helps push investors to
seek alternatives and REITs have been appealing, Pandey added.
"For the high net-worth individuals, the current 6-7 percent
REIT yield is pretty attractive," he said.
With a portfolio of four properties in Germany, IREIT is
expected to have an initial focus on Germany and the United
DBS Bank Ltd is sole global coordinator for the
deal and is a joint bookrunner with Barclays.
Tong's holdings in nine Singapore-listed REITs add up to
about $780 million, Thomson Reuters data showed.
He owns 64.75 percent of Viva Industrial Trust,
4.58 percent of Suntec Real Estate Investment Trust,
12.93 percent of Cambridge Industrial Trust and 16.20
percent of OUE Commercial Real Estate Investment Trust
, among others.
Tong is not alone in buying into Singapore's REITs. Gordon
Tang, a Chinese national who heads the Singapore-listed property
developer Singhaiyi Group, stood side-by-side with
Tong as cornerstone investors in the initial public offerings of
both OUE Commercial REIT and Frasers Hospitality Trust
The FT ST REIT index, which tracks the
performance of REITs listed in Singapore, has risen more than 8
percent so far this year, beating the 4 percent gain in the
benchmark Straits Times Index.
Tong's Summit Group, which owns some high-end hotels and the
popular shopping centre Longemont in Shanghai, held total assets
of 64.9 billion yuan ($10.46 billion) at the end of 2013,
according to IREIT's prospectus.
($1 = 1.2423 Singapore dollars)
($1 = 6.2034 Chinese yuan)
(Editing by Matt Driskill)