Manulife Reit said to seek up to US$470m in Singapore IPO

Manulife Centre at Bras Basah.
Manulife Centre at Bras Basah. PHOTO: MANULIFE SINGAPORE

SINGAPORE (BLOOMBERG) - Manulife Financial Corp, Canada's largest life insurer, will seek as much as US$470 million (S$630.1 million) in its second attempt at a Singapore initial public offering of its US properties, according to people with knowledge of the matter.

Manulife US Reit, backed by three office buildings in Los Angeles and Atlanta, will offer 566 million units at 82 cents to 83 cents apiece, the people said. The trust, which plans to start taking orders as soon as Tuesday, will offer a dividend yield of as much as 6.7 per cent for this year and 7.2 per cent for 2017, the people said, asking not to be identified as the information is private.

The offering will be Singapore's first initial share sale above US$100 million since BHG Retail Reit raised US$194 million in November. A successful listing will give a boost to the Singapore exchange, which had the smallest haul of IPOs among the region's four largest stock markets in 2015.

Manulife US Reit delayed its IPO in July last year because of volatile market conditions. A representative for the Reit didn't immediately respond to an e-mail and phone call seeking comment.

Manulife US Reit will sell about 35 per cent of the institutional offering to cornerstone investors, including private banking clients of Credit Suisse Group and DBS Group Holdings, according to the people. DBS Bank, Malaysia's Fortress Capital Asset Management, Oman Investment Fund and Lucille Holdings Pte are cornerstone investors in the offering, the people said.

Commitments from cornerstone investors and indicated interest from anchor investors accounts for about 80 per cent of the sale, according to the people. Manulife US Reit plans to start trading on May 20, the people said.

DBS, China International Capital Corp, Credit Suisse and Deutsche Bank AG are arranging the sale, the people said.