Mapletree to raise up to $1b from commercial Reit IPO

Offering to be second-biggest here this year after HPH Trust’s US$5.4b IPO

Mapletree Investments plans to raise up to $1.02 billion by listing three of its retail and office assets in a property trust, it said yesterday.

The deal values Mapletree Commercial Trust (MCT) at up to $1.69 billion. Mapletree Investments, which is fully owned by Temasek Holdings, will hold between 40 per cent and 45.5 per cent of the trust after the offer.

The initial public offering (IPO) will be the second-biggest listing in Singapore this year after the US$5.4 billion offering by Hutchison Port Holdings (HPH) Trust last month.

Mapletree Investments had planned to lodge the prospectus for MCT in March, but had to delay the IPO process due to volatile markets caused by the earthquake and tsunami in Japan.

In a preliminary prospectus filed with the Monetary Authority of Singapore yesterday, MCT said it will sell up to 814.4 million units (including an over-allotment option) at 84 cents to 91 cents per unit to institutional investors and the public.

In addition, cornerstone investors – including insurance company AIA Group – have committed to take up another 302.2 million units.

Including the sponsor’s stake, there will be a total of 1.86 billion units. This places MCT’s market capitalisation at between $1.56 billion and $1.69 billion.

Mapletree, for its part, will raise between $852.7 million and $1.02 billion from the IPO depending on the pricing and whether the over-allotment option is taken up.

The trust will initially hold three assets worth $2.82 billion in all – Singapore’s largest mall VivoCity, and the Bank of America Merrill Lynch HarbourFront and PSA Building office buildings.

Mapletree Investments has also granted MCT the right of first refusal for the acquisition of properties with about 5.1 million square feet of net lettable area – including Mapletree Business City.

Analysts BT spoke to said the valuations of the three initial properties should be attractive to investors.

For example, the largest asset in MCT’s portfolio, VivoCity, is valued at $1.98 billion, or around $1,900 per square foot of net lettable area. This compares favourably with similar malls in the portfolios of other retail real estate investment trusts (Reits) listed in Singapore, the analysts said.

Because of this, demand for MCT’s units should still be strong in spite of recent market volatility, said an analyst with a foreign brokerage here.

‘I think if the units are priced right, there is no reason why there shouldn’t be demand, and right now, it (the pricing) looks pretty reasonable,’ he said. ‘It looks like the (projected) yields are in line with other blended retail and office Reits listed here.’

MCT has projected a yield of between 5.47 per cent and 5.92 per cent for the year ending March 31, 2012; and a yield of between 5.96 per cent and 6.46 per cent for the year after.

Analysts put the weighted average yield for the entire Reit sector in Singapore at around 6 per cent.

MCT also said in its prospectus that it has firmed up four cornerstone investors who have committed to invest up to $275 million in the IPO.

The cornerstone investors include AIA, which has agreed to invest up to $125 million. The other three investors – Hillsboro Capital, Japan’s Itochu Corp and retailer NTUC FairPrice Co-operative – have agreed to invest up to $50 million each.

Citigroup, CIMB, DBS, Deutsche Bank and Goldman Sachs have been appointed as joint bookrunners, issue managers and underwriters for the offer.

Mapletree Investments’ third Reit, Mapletree Industrial Trust, raised close to $1 billion when it was listed in October 2010.

As at end-December 2010, the group and its subsidiaries own and manage more than $14.4 billion of office, logistics, industrial, residential and retail properties with an extensive network of offices in Singapore, China, Hong Kong, India, Japan, Malaysia, South Korea and Vietnam.

Update: Mapletree Commercial Trust to raise S$924m in IPO

SINGAPORE – Mapletree Commercial Trust is set to raise as much as S$924 million (US$733 million), including from cornerstone investors, in an initial public offering (IPO) in Singapore, underscoring a return of confidence to the market.

The IPO of the trust, managed by Singapore state investor Temasek’s property arm, was delayed for two weeks, after a massive earthquake and tsunami struck Japan and caused widespread panic-selling in equity markets.

But the launch of Mapletree Commercial’s IPO comes amid a recovery in global stock markets, indicating investors’ risk appetite may be returning after a slump in the aftermath of the earthquake.

Mapletree Commercial plans to sell 1.02 billion units, excluding an over-allotment option, to investors at an indicative price of S$0.84 to S$0.91 each, it said in a prospectus on Wednesday.

This translates to a distribution yield of about 5.5 to 5.9 per cent for the fiscal year ending March 31, 2012, offering investors a chance to reap a steady income stream and to tap into the growth in Singapore’s retail industry and a recovery in the office property sector.

The offering includes 302.2 million units, which will be sold to cornerstone investors AIA Group, Hillsboro Capital, Itochu Corporation and NTUC FairPrice.

Mapletree Commercial will have an initial portfolio worth about S$2.8 billion, including Singapore’s largest shopping mall VivoCity, and two office properties in the city-state.

Singapore expects to welcome 12 to 13 million visitors this year, up from 11.6 million in 2010, helped by growing travel within Asia, which could benefit Mapletree Commercial’s VivoCity shopping mall due to its proximity to the tourist attraction Sentosa.

Mapletree Commercial’s sponsor, Mapletree Investments, has also granted the trust a right of first refusal for the acquisition of 10 properties including Mapletree Business City, an office precinct in the south of Singapore.

Citigroup, DBS Bank, Deutsche Bank and Goldman Sachs are the joint global coordinators and, along with CIMB, are also joint bookrunners and issue managers. — REUTERS

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.

Mapletree postpones commercial Reit IPO

It had expected to raise $1b but jittery market stays its hand

Mapletree Investments has postponed its planned commercial property trust, which was expected to raise about $1 billion, BT understands.

The property group had planned to lodge the prospectus for its Mapletree Commercial Trust (MCT) this week. But the initial public offering, or IPO, has now been delayed due to volatile markets caused by the earthquake and tsunami in Japan 10 days ago, the sources said.

The group said yesterday that it is not at a stage of making any announcement about its planned commercial property trust. ‘Mapletree Investments has previously disclosed plans for a commercial Reit. At this point we are not at a stage where an announcement is required on our part. We will make the necessary announcements in due course,’ said a Mapletree spokesperson.

BT understands that there are doubts about the filing after the Japanese earthquake. The much anticipated Hutchison Port Holdings (HPH) Trust, the world’s largest IPO so far this year, went underwater last Friday on its market debut in Singapore. Market watchers had predicted a lacklustre first-day showing from the US$5.45 billion listing as investors remained jittery about Japan’s nuclear crisis.

MCT is expected to hold the VivoCity mall in its portfolio. Other assets could include Merrill Lynch HarbourFront, PSA Building and Mapletree Business City, an integrated business hub on Alexandra Road. The real estate investment trust (Reit) is aiming to raise about $1 billion, reports have said.

MCT is the fourth Reit by Mapletree Investments, which is fully owned by state investment company Temasek Holdings.

The property group listed Mapletree Logistics Trust in 2005 and jointly launched Lippo-Mapletree Indonesia Retail Trust with Lippo Group in 2007. Its third Reit, Mapletree Industrial Trust, raised close to $1 billion when it was listed in October 2010.

One analyst said that MCT will still hold appeal for investors – once the market settles – as it is a ‘brand-name’ IPO.

Mapletree Commercial Trust IPO indicative yield 5.2-5.8%

SINGAPORE – MAPLETREE Commercial Trust, a real estate industrial trust managed by Singapore state investor Temasek's property arm, has set an indicative yield of 5.2 to 5.8 per cent for its upcoming initial public offering, IFR reported on Thursday.

The REIT, whose assets include Singapore's largest shopping mall Vivocity and two office blocks, is seeking to raise about $1 billion and is currently going through a pre-marketing exercise ahead of an April listing.

Citigroup, DBS and Goldman Sachs are the global co-ordinators and joint bookrunners with CIMB and Deutsche Bank.