Elite Commercial Reit to raise up to $229.7m in Singapore's first pound-denominated IPO

SINGAPORE (THE BUSINESS TIMES) - The offer price for the first Reit denominated in British pounds to list here has been set at £0.68 per unit.

With this offer price, Elite Commercial Reit's proposed Singapore initial public offering (IPO) will raise around £119.5 million (S$209.3 million) to £131.2 million (S$229.7 million), based on a total offering size of 175.7 million to 192.9 million units, according to a term sheet on Monday (Jan 20) seen by The Business Times.

It will follow a slew of four foreign commercial Reits which listed in Singapore last year - ARA US Hospitality Trust, Eagle Hospitality Trust, Prime US Reit and Lendlease Global Commercial Reit.

Elite Commercial Reit has an initial portfolio comprising 97 mainly freehold properties in Britain with a total appraised value of £319.1 million (S$558.7 million). A quarter of the properties - by rental income - are in London, with the rest in second-and third-tier cities across Britain, including Glasgow and Cardiff.

The Reit's sponsors are Elite Partners Holdings (EPH), the investment holding firm for Elite Partners Group, Ho Lee Group and Sunway RE Capital, a wholly-owned subsidiary of Sunway, one of Malaysia's largest conglomerates.

The IPO's Singapore public offer will run from Jan 28 to Feb 4, and is expected to raise "at least" £3.3 million to £3.9 million, equivalent to some 3 per cent of the total offering size, the term sheet stated.

Meanwhile, the placement tranche of £63.2 million to £74.3 million - more than half of the offering size - will be available to international investors outside the US.

The cornerstone tranche comprises some £52.9 million or up to 44.3 per cent of the offering, already committed by the cornerstone investors - Bank of Singapore, CIMB Bank Berhad Singapore Branch and UBS AG Singapore Branch, on behalf of their private banking clients.

The real estate investment trust (Reit) is expected to list on the Singapore bourse's mainboard on Feb 6, with a market cap of about £214.5 million to £226.2 million.

 
 

There will be an over-allotment option of up to 6.6 million units or up to £4.5 million. The exercise of this option will not increase the total number of units in issue post-IPO.

The indicative distribution yield is forecast at 7.1 per cent to 7.4 per cent for fiscal 2020, according to the term sheet.

If the float is successful, Elite Commercial Reit's leverage at listing is estimated at 33.4 per cent to 37.2 per cent.

The first distribution will be for the period from the listing date to June 30, 2020, to be paid by Sept 30, 2020. Unitholders can opt to receive their distributions in British pounds or Singapore dollars.