GLP, MIT take a breather, count their gains

Their trading volumes continue to reflect healthy interest; both end higher for the week

SHARES of Global Logistic Properties (GLP) and Mapletree Industrial Trust (MIT) – the two largest initial public offerings (IPOs) this week – pulled back yesterday, as the broader market struggled for direction.

But their trading volumes continued to reflect the healthy interest in the counters – and both finished higher for the week.

Shares of GLP finished four cents down at $2.25 apiece yesterday, seeing almost 66 million shares change hands. MIT closed five cents down at $1.11, with almost 112 million shares traded.

One local trader attributed the dips in share price yesterday to investors being keen to lock in their profits on the two stocks before the end of the week.

And certainly, there was much to be had for MIT, whose share price soared 29 per cent to $1.20 in intra-day trade on its debut on Thursday, from an offer price of $0.93, before closing at $1.16. And, despite slipping yesterday, MIT still locked in a 19 per cent gain for the week.

Its closing price yesterday brings MIT's market cap to a total of $1.62 billion, based on a float of 1.46 billion shares. It is the largest Singapore real estate investment trust (Reit) IPO, to date.

MIT brings the combined market capitalisation of all the Reits and property trusts listed on the Singapore Exchange (SGX) – 24 in total – to some $36 billion, making Singapore the largest Reit market in Asia outside of Japan.

GLP also finished significantly stronger for the week. Its closing price of $2.25 yesterday is a 15 per cent gain on its $1.96 offer price. The counter also touched a high of $2.29 on Tuesday, the day after it made its trading debut.

Its market cap now stands at $10.1 billion, making it one of the larger stocks on the exchange.

GLP – which has Government of Singapore Investment Corporation (GIC) as its single-largest shareholder – is also the largest Reit IPO in the world.

It raised a total of $3.9 billion from its offering, having exercised its overallotment option of 234.6 million shares this week. This means, GLP beat out the previous record holder, Hong Kong-listed Link Reit which, in 2005, raised US$2.9 billion (S$3.8 billion) in its IPO.

GLP's IPO is also Singapore's second-largest after SingTel's in 1993, which raised $4 billion.

The sterling performance of the two new listings this week is expected to breathe life into the IPO market. Market watchers say GLP and MIT's performance this week should inspire other IPOs to come to the market.

SGX chief Magnus Bocker has said that he expects more IPOs in the current quarter, and that the number of IPOs should touch levels seen in the first quarter of fiscal 2010. In that quarter – or the three months ended September 2009 – SGX ushered in 11 new listings.

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.'

For Immediate Release

MAPLETREE INDUSTRIAL TRUST UNIT PRICE SURGED ON TRADING DEBUT
• Debuted strongly at S$1.15, representing an increase of 23.7% over the IPO Offering Price
• Closed at S$1.16, representing an increase of 24.7% over the IPO Offering Price
• Largest Singapore Real Estate Investment Trust IPO to-date
• Most active counter of the day with 345.0 million Units traded despite only three hours of
trading

Singapore, 21 October, 2010 – Mapletree Industrial Trust (“MIT”), a Singapore-focused real estate investment trust (“REIT”) and one of the largest landlords of industrial space in Singapore, enjoyed a strong trading debut at 2.00 p.m. today on the Main Board of Singapore Exchange Securities Trading Limited (the “SGX-ST”).

Raising gross proceeds of approximately S$1.19 billion from the offering of 594,913,000 Units to the public and under the placement tranche, as well as the Mapletree Cornerstone Subscription Units and the Cornerstone Units (as defined below), MIT is the largest Singapore REIT IPO to-date."

Excellent Debut

MIT’s units (“Units”) opened strongly at S$1.15 per Unit, a 23.7% increase over its offering price of S$0.93 per Unit (“Offering Price”). The Units reached an all-day high of S$1.20 per Unit, a 29.0% jump over its Offering Price. At the close of trading, the Units ended 24.7% higher than its Offering Price of S$0.93 at S$1.16 per Unit with approximately 345.0 million Units changing hands, making it the most actively traded counter on the SGX-ST today.

Commenting on the trading debut, Mr Tham Kuo Wei, Chief Executive Officer of Mapletree Industrial Trust Management Ltd, as manager of MIT (the “Manager”), said, “We are delighted with MIT’s excellent trading debut, which is a strong indication of the market’s confidence in the fundamentals and growth prospects of MIT.”

Overwhelming Response

The offering of 594,913,000 Units (the “Offering”), had earlier received overwhelming response with subscription rates of 27.7 times by retail investors (based on 80,645,000 Units and excludes the 25,500,000 Reserved Units) and 39.6 times by institutional investors (through the placement tranche comprising 488,768,000 Units).

The Sponsor1’s strong support of and commitment to MIT was demonstrated through its aggregate holding2 of 453,424,000 Units in MIT, which represents approximately 31.0% of the total number of Units in issue, with the over-allotment option exercised in full.

MIT had earlier secured prominent cornerstone investors such as Stichting Depository APG Tactical Real Estate Pool, American International Assurance Company Limited, Singapore Branch, American International Assurance Company (Bermuda) Limited, Henderson Global Investors, Columbia Wanger Asset Management, LLC, D.E. Shaw Valence International, Inc. and Prudential Asset Management(Singapore) Limited (acting for itself and on behalf of one or more investment funds and clients), who subscribed for an aggregate of 322,578,000 Units (the “Cornerstone Units”). These Cornerstone Units are also separate from the Offering.

MIT’s IPO 38 times oversubscribed

Trust expected to raise as much as $1.19b in gross proceeds from IPO

Mapletree Industrial Trust’s (MIT) initial public offering (IPO) saw a strong take-up rate with an oversubscription of about 37.9 times, led by demand from institutional players.

The take-up means that more than $20.1 billion in total of application money was made available for the IPO, MIT said yesterday.

MIT is expected to raise as much as $1.19 billion in gross proceeds from its IPO, if an overallotment option of 91.75 million units is exercised.

Mapletree is selling 1.28 billion MIT units at 93 cents apiece. This includes some 595 million units, comprising 489 million units that were placed out and 106 million units that were sold to the public.

Six cornerstone investors, namely AIA, Prudential Asset Management (Singapore), Henderson Global Investors, Columbia Wanger Asset Management, US investment firm DE Shaw and Dutch pension fund APG, will subscribe for a separate 323 million units.

Mapletree’s two subsidiaries, Mapletree Dextra Pte Ltd and Sienna Pte Ltd, will also subscribe for 359 million units, giving Mapletree a post-IPO stake of about 31 per cent if the greenshoe option is fully exercised.

The placement tranche of 489 million units was oversubscribed by 39.6 times, with a total value exceeding $18 billion.

The public tranche included 25.5 million units reserved for subscription by the directors, management, employees and business associates of Mapletree.

The remaining 80.6 million units, representing about 6.3 per cent of the total unit sale (excluding the overallotment), was about 27.7 times oversubscribed, translating to total value of about $2.1 billion.

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 unitholders from listing until March 31, 2012, MIT said at a briefing last week.

MIT, which is the third real estate investment trust to be launched by Temasek Holdings’ Mapletree Investments, has a portfolio of 70 industrial properties in Singapore.

Global Logistic Properties (GLP) also saw firm interest in its IPO, which was more than 12 times oversubscribed.

Out of the 88,393 public offer applications for GLP, 85,136 applications, or 96 per cent, were successful ones.

The balloting results of the GLP applications also threw up some startling numbers. It showed that there were 22 successful applicants from the public who had initially applied for at least one million shares, coughing up at least $1.96 million upfront.

They were eventually allotted 10,000 shares each.

Shares of GLP continued their uptrend yesterday, gaining 5.53 per cent or 12 cents to end at $2.29. It was the most active stock on the Singapore Exchange, with 262 million shares changing hands.

Trading of the units of MIT is expected to start tomorrow at 2pm.

MIT expected to raise up to $1.19b from IPO

Offer opens today and closes on Oct18; unit trading may start on Oct21

MAPLETREE Industrial Trust (MIT) is expected to raise up to $1.19 billion in gross proceeds from its initial public offering (IPO), having priced its offer price at the top end of the indicative range.

It is on the lookout for acquisition opportunities and asset-enhancement initiatives for existing properties.

While the bulk of IPO proceeds goes towards paying off debt, MIT chief executive Tham Kuo Wei said the trust has sufficient working capital and debt headroom of $256 million to seek further growth.

‘We have sufficient funds set aside for operational activities,’ he told reporters at a briefing yesterday. ‘If you are talking about growth acquisitions, we will be able to draw on the debt headroom if needed.’

But as a trust with a local mandate, MIT will focus on Singapore for the time being and will seek feedback from unitholders before expanding overseas.

For its IPO, MIT is offering 594.91 million units at $0.93 per unit, subject to an overallotment option of another 91.75 million units.

Separately, six cornerstone investors have agreed to subscribe for 322.58 million units at the offer price. They are AIA, Prudential Asset Management (Singapore), Henderson Global Investors, Columbia Wanger Asset Management, US investment firm DE Shaw and Dutch pension fund APG.

The sponsor’s two wholly owned subsidiaries, Mapletree Dextra Pte Ltd and Sienna Pte Ltd, will also subscribe for 359.45 million units at the offer price, taking Mapletree’s stake post-listing to about 31 per cent, assuming that the greenshoe option is fully exercised.

The 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.

MIT chief financial officer Loke Huey Teng said the trust plans to pay out 100 per cent of its distribution income to unitholders from listing until March 31, 2012.

The public offer opens today and closes on Oct 18. The units are expected to commence trading on Oct 21.

MIT is the third real estate investment trust (Reit) to be launched by Temasek’s wholly owned Mapletree Investments. It is Singapore’s largest private landlord for multi-user flatted factory space with an 11.2 per cent market share.

Valued at $2.1 billion as at Aug 31, MIT’s IPO portfolio of 70 properties has a total net lettable area (NLA) of about 1.1 million square metres and a gross floor area of 1.5 million sq m.

Mr Tham said there was potential for organic rental revenue growth in the next few years as MIT’s average rents catch up with market rents.

Singapore’s strong manufacturing sector is expected to continue to drive demand for logistics and industrial space, he added.

MIT will be mainly using the IPO proceeds and a new debt facility of $837 million from three banks – DBS Bank, Standard Chartered Bank and Citibank – to pay down the existing debt.

Post-listing, MIT will have an average debt maturity of 3.4 years with no more than 30 per cent of debt falling due in any one year, which is ‘appropriate for a trust of this size’, Ms Loke said.

MIT has obtained an expected credit rating of BBB+ from Fitch Ratings, which allows it to borrow up to a maximum of 60 per cent of the value of the deposited property.

Post-listing, its aggregate leverage will be 38.5 per cent, up from 38.1 per cent as at March 31.