MIT – BT

Buoyant MIT defies sombre sentiment

Mapletree Industrial Trust (MIT) made a strong debut on the Singapore Exchange (SGX) yesterday – a day when the broader market was dampened following news of China's surprise interest rate hike on Tuesday.

MIT soared to a high of $1.20 in intra-day trade, from its offer price of $0.93, before eventually closing at $1.16 – giving it a market capitalisation of $1.70 billion. The counter topped the volume list, with over 345 million shares changing hands.

And MIT, which raised $938.5 million from the initial public offer, said yesterday an over-allotment option of 91.75 million units – or 15.4 per cent of the total number of units in the offer – will be exercised in full by the joint book-runners.

This means a total of some 1.28 billion units will be sold, resulting in aggregate takings of $1.19 billion, at the offer price of $0.93.

The IPO – which included 489 million units that were placed out and 106 million units that were sold to the public – was 37.9 times subscribed, led by strong demand from institutional players.

323 million shares were subscribed for by six cornerstone investors – AIA, Prudential Asset Management (Singapore), Henderson Global Investors, Columbia Wanger Asset Management, US investment firm DE Shaw and Dutch pension fund APG. Mapletree's two subsidiaries, Mapletree Dextra Pte Ltd and Sienna Pte Ltd, subscribed for 359 million units.

MIT's performance compares with that of GIC's logistics arm, Global Logistic Properties (GLP) – Singapore's biggest IPO since 1993. Its shares jumped 11 per cent on its trading debut earlier this week, after raising $3.45 billion.

Shares of GLP continued to gain yesterday, closing $0.03 up at $2.29.

MIT's offer price represents an annualised distribution yield of 7.6 per cent for fiscal 2010, which is estimated to rise to 8 per cent for fiscal 2011. It expects to pay out all of its distribution income to unit-holders from listing until March 31, 2012.

MIT is managed by Mapletree Investments, in turn owned by Temasek Holdings. Mapletree Investments also manages Mapletree Logistics Trust and Lippo-Mapletree Indonesia Retail Trust. Part of the proceeds from MIT's IPO will be used to repay its existing debt and the purchase consideration for Mapletree Singapore Industrial Trust.

Tham Kuo Wei, CEO of Mapletree Industrial Trust Management, which manages Mapletree Industrial Trust, said yesterday: 'We believe the Singapore real estate investment trust market will continue to grow from strength to strength and that SGX offers an excellent platform for MIT to reach out to a large pool of sophisticated local and international investors.'

SGX said in a statement yesterday that it welcomes MIT's listing: 'With an extensive portfolio consisting of high-quality industrial properties, and a large and diversified tenant base, MIT presents investors an attractive opportunity to participate in Singapore's industrial property market.'