MCT – BT

Mapletree Commercial Trust launching IPO

Reit is expected to carry VivoCity under its umbrella of properties

MAPLETREE Commercial Trust (MCT) is reportedly relaunching its $1 billion initial public offering (IPO) in Singapore as early as today, according to sources familiar with the deal.

In fact, one of the sources said that MCT’s prospectus is slated to be lodged today.

The commercial-sector Reit is expected to carry the VivoCity mall under its umbrella of properties. Other assets could also include Merrill Lynch HarbourFront, PSA Building and Mapletree Business City, an integrated business hub on Alexandra Road.

Yield-wise, Reuters gave earlier indications that MCT was undergoing a pre-marketing exercise ahead of the listing with an indicative yield of 5.2 per cent to 5.8 per cent.

The property group postponed the lodgement of its prospectus last month in the light of volatile conditions triggered by the March 11 earthquake and tsunami in Japan as well as a lacklustre trading debut of Hutchison Port Holdings Trust.

MCT is the fourth real estate investment trust (Reit) by Mapletree Investments, which in turn is fully owned by Singapore investment company Temasek Holdings.

Mapletree Investments first listed Mapletree Logistics Trust back in 2005 and subsequently jointly launched Lippo-Mapletree Indonesia Retail Trust with Lippo Group in 2007.

More recently, the property group listed its third Reit, Mapletree Industrial Trust, which raised close to $1 billion when it was listed in October last year.

In terms of the current IPO landscape, firms such as Perennial China Retail Trust have held back on listing on the local bourses given poor investor appetite this year.

The number of firms, especially Chinese counters (S-chips) also seem set to decline amid poor take-up by investors and cornerstones alike. So far, the majority of IPOs listed in 2011 are trading below their offer prices.

That said, analysts expect MCT to remain attractive to a broad range of investors as yield-plays continue to dominate in the region.

Investment bankers also believe that despite the mercurial nature of today’s markets, IPOs issued by the ‘big boys’ of each sector are likely to retain their charm with investors as many bank on names with ‘deeper pockets’ as a form of investment ‘insurance’.

More importantly, overall sentiment and timing are key factors in determining an IPO’s success.

With a recent wave of optimism sweeping across domestic equity markets, perhaps MCT may be better ‘equipped’ to set off at a good price and stay above ground on its debut trading day.