Daiwa House Logistics Trust units close flat in debut trading

Daiwa House Logistics Trust (DHLT), a real estate investment trust (Reit) that will invest in logistics and industrial real estate assets across Asia, commenced trading on the Singapore Exchange yesterday. Its units closed flat at 80 cents apiece.

The company on Thursday announced that the public offer of 25 million units to Singapore investors under its initial public offering (IPO) was 9.5 times subscribed.

At the close of the offering at noon on Wednesday, 7,543 valid applications for 237 million units were received for the Singapore public offer.

The international placement tranche of over 219.4 million units at the offer price of 80 cents apiece was 4.9 times subscribed.

The Reit manager said the placement tranche "attracted strong interest from a good mix of long-only institutional investors, insurance firms, multi-strategy funds, family offices and high-net-worth individuals".

Separately, cornerstone investors have entered into separate subscription agreements at the same offer price for a total of nearly 336.1 million units, representing 49.8 per cent of the total number of outstanding units at the IPO.

In a statement, Mr Takeshi Fujita, chief executive officer of the manager, said of the strong support for the offering: "We believe that this is testament to the attractiveness of our portfolio of high-quality modern logistics properties, as well as the strength of our sponsor - Daiwa House Industry Co, one of the largest construction and real estate development companies in Japan."

DHLT plans to use the bulk of the gross proceeds from the IPO - - together with the draw-down on 35.6 billion yen (S$428 million) of loan facilities on the listing date - to fund the $840.5 million purchase of an initial portfolio of 14 logistics properties in Japan.

The remainder of the funds will be used for issue expenses, other transaction costs, cash reserves and working capital, as well as a refundable consumption tax of $67.9 million.

The properties in the IPO portfolio have an average age of 3.7 years with a total land area of 420,393 square metres (sq m); the total net lettable area is 423,920 sq m.

DBS Bank and Nomura Singapore were the joint issue managers for the IPO. They were joined by Citigroup Global Markets Singapore, Credit Suisse Singapore, Daiwa Capital Markets Singapore, Mizuho Securities Singapore, Morgan Stanley Asia Singapore and SMBC Nikko Capital Markets Limited as the joint book runners and underwriters.

THE BUSINESS TIMES

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A version of this article appeared in the print edition of The Straits Times on November 27, 2021, with the headline Daiwa House Logistics Trust units close flat in debut trading. Subscribe