MCT – BT
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
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.
StarHill Global – BT
Starhill Global’s KL mall to get RM25m makeover
It will create more net lettable area and boost income
STARHILL Gallery – a mall that is part of Starhill Global Reit’s portfolio – will undergo a RM25 million (S$10.4 million) makeover that will create about 8,100 square feet in additional net lettable area.
YTL Starhill Global, the Reit’s manager, said yesterday that the asset redevelopment for the mall in Kuala Lumpur will translate to an additional net property income of about RM1.7 million per annum.
This increase in NPI represents a return-on-investment of about 7 per cent, the Reit manager added.
The works should be completed by the second quarter of this year, with the Reit manager hoping to make store fronts more visible and increase the sale of luxury products.
The renovation cost will be funded from the remaining proceeds of the rights issue by Starhill Global Reit that was completed in 2009, as well as working capital.
Two years ago, the Reit raised $337.3 million through a rights issue – joining the rest of its Reit peers in making a cash call during the financial crisis.
The additional net lettable area will be leased to Katagreen Development, which is the current master tenant of Starhill Gallery and an indirect wholly owned subsidiary of YTL Corporation Bhd, under a new master tenancy agreement.
The initial term of the new agreement will run till June 27, 2013, with an automatic renewal for a second term of three years. The new lease runs concurrently with an existing master lease tenancy agreement, the Reit manager said.
Terms and conditions under both master leases work in an increase of about 7 per cent in the master lease rent at the end of each of the first two terms.
Starhill Global Reit is held by a bankruptcy-remote special purpose vehicle (SPV), Ara Bintang Berhad (ABS SPV).
Such SPVs have operations restricted to the buying and financing of specific assets, and have their assets protected from debt obligations if the parent firm goes bankrupt.
ABS SPV and Katagreen have each a put and a call option respectively to extend the tenancy for a third three-year term when the second term expires.
Shares of Starhill Global Reit gained half a cent, or 0.8 per cent, to finish at 63 cents yesterday.
PLife – BT
PLife Reit’s Japan properties unaffected
IN AN update, the manager of Parkway Life Real Estate Investment Trust (PLife Reit) said yesterday that all its 30 properties in Japan were unaffected by the earthquake and tsunami that hit the nation last month.
‘The manager, together with our Japan asset managers and operators, have conducted further checks on our properties in Japan. We are pleased to confirm that none of our Japan properties have been structurally affected and that business at all 30 properties continue to be in operation,’ Parkway Trust Management said in a release to the Singapore Exchange (SGX) yesterday, adding that it will continue to monitor the situation.
In an earlier statement to SGX on March 13, PLife Reit’s manager noted that most of the Reit’s Japan properties are located in the Kansai and Kyushu regions, which are relatively less affected.
‘Our nearest property to the nuclear plant site (is) at least 200 kilometres away,’ it said.
Separately, it was also announced to SGX yesterday that Pulau Memutik Ventures Sdn Bhd had acquired the total issued share capital of Integrated Healthcare Holdings (IHH) from Malaysia’s sovereign wealth fund Khazanah Nasional Bhd on March 29. IHH – via indirect wholly owned subsidiaries Parkway Trust Management and Parkway Investments – holds around 216.81 million units of PLife Reit. As such, Pulau Memutik holds a deemed stake of 35.84 per cent in PLife Reit.
A-REIT – DBSV
Positioning for future growth
• Cash call to fund recent acquisition/development activities
• Dilution in FY12F but earnings kicker in FY13F
• Maintain HOLD with S$2.15 TP.
New acquisition coupled with an equity fund raising. In 2 separate announcements, Ascendas REIT announced (1) acquisition of Neuros & Immunos, located at Biopolis, for S$125.6m and (2) A private placement to raise S$400m gross proceeds at S$ 1.91-1.96/unit, representing a 4.3-6.7% discount to its VWAP on 30 Mar. We note that the placement was completed, priced at S$1.94/unit
(1) Acquisition of Neuros & Immunos for S$125.6m. Located in an emerging research hub for biomedical services at One-North, Neuros & Immunos is a multi-tenanted research and office building, and houses firms involved in neuroscience and immunology research. While we note that it caters to a specialized field, the building is understood to be 100% leased.
(2) Gross proceeds of S$400m to fund recent acquisition & development activities. Proceeds will be deployed towards its ongoing Build-to-Suit development project, selected enhancement works at Techview & 10 Toh Guan Road, forward acquisition of a business space property in Shanghai and Neuros & Immunos. We estimate these properties to return a weighted average projected yield of 7.5% vs implied cost of capital of 7.0%, hence these projects are earnings accretive.
Near term dilution, DPU growth from FY13 onwards. While we estimate there will be DPU dilution in FY12F, unitholders can look forward to a 5% uptick in DPU in FY13F as a majority of its projects are expected to start contributing positively from FY12F/13F. Our FY12-13F distribution income are adjusted downwards by 3-7% to take into account the fund raising, with TP accordingly revised down slightly to S$2.15.