* OUE's hospitality trust to price later in the day
* REITs in demand due to attractive yields
* At least two more Singapore REIT deals expected
By Anshuman Daga and S. Anuradha
SINGAPORE, July 17 Singapore's IPO market got a
boost after a property trust from Singapore Press Holdings Ltd
priced at the top end of its indicative range on
Wednesday, underscoring strong appetite for REITs from
Hotel and property group Overseas Union Enterprise Ltd
, which is backed by Indonesian tycoon Stephen Riady,
is also set to price its $480 million hospitality trust later in
Demand for REIT listings in Singapore is one of the brighter
spots in Asia's IPO market which has been hurt by volatility and
concerns about slowing growth in China, and industry players say
more REIT deals are in the offing.
"We know of a number of deals which may potentially come
out. So, I think the number of offerings remain on the table,"
said Lai Yeu Huan, head of equity research at Nikko Asset
Singapore Press Holdings said its REIT will raise S$504
million ($400 million) after selling 560 million units at 0.90
Singapore cents per share, the top of its indicative range of
But analysts also said offerings had to be realistically
priced, noting that OUE had to cut its free float for its deal,
and that the properties had to be attractive.
"Right now really, you have to offer deals with very well
understood assets, assets which perhaps are very prominent in
Singapore," Nikko's Lai said.
The Singapore Press Holdings' REIT includes the luxury
Paragon Shopping Mall located in Singapore's Orchard Road, and
Clementi Mall in the suburbs. The REIT and business trust from
Overseas Union Enterprise includes the posh Mandarin Orchard
hotel and Mandarin Gallery shopping mall on Orchard Road.
SPH has projected a yield of 5.79 percent for its 2014
financial year. The IPO lists on July 24.
Companies have flocked to Singapore to list REITs and
business trusts, offering high dividends to attract high
net-worth individuals as well as institutional and retail
The two IPOs were launched after markets recovered from a
selldown sparked by signals from the Federal Reserve that it
could reduce its massive stimulus.
At least two more REIT listings are likely. IFR, a Thomson
Reuters publication, reported that Singapore's Soilbuild
Business Space REIT began premarketing on Wednesday for its
S$500 million issue and Viva Industrial Trust REIT is expected
to launch a S$400 million deal as early as September.
Citing company sources, Singapore's Today newspaper also
reported this month that Thai billionaire Charoen
Sirivadhanabhakdi is planning a REIT that could be valued at
more than S$2 billion and include assets from Fraser and Neave
and his own firms. An external spokeswoman for
Charoen's group declined comment to Reuters.
Equity capital market deals in Southeast Asia jumped 54
percent to $22.5 billion in the first half of 2013, a quarter of
all Asia-Pacific ex-Japan volumes. Stock offerings in Singapore,
the Philippines and Indonesia more than doubled, data from
Thomson Reuters shows.
OUE cut the free float for its hospitality trust amid
adverse market conditions. It is retaining about a 48 percent
stake compared to an earlier target of close to 30 percent. The
trust is offering a projected yield of 7.30 percent to 7.46
percent for 2014.
Singapore's REIT sector index, which jumped
nearly 37 percent last year, has fallen about 15 percent from a
record struck in late April. All sectors have declined this year
from their highs, but REITs are the worst performers. The
broader market index is down 7 percent from the
year's high scaled in late May.
($1 = 1.2596 Singapore dollars)
(S. Anuradha is a reporter for IFR, Additional reporting by
Saeed Azhar; Editing by Edwina Gibbs)