ERA set for relisting on SGX under Apac Realty

The first-quarter net profit of Apac Realty, which operates under the ERA brand, was $4 million, doubling from $1.9 million in the same period last year. The company intends to use the IPO proceeds to focus on regional expansion.
The first-quarter net profit of Apac Realty, which operates under the ERA brand, was $4 million, doubling from $1.9 million in the same period last year. The company intends to use the IPO proceeds to focus on regional expansion.PHOTO: LIM YAOHUI
Apac Realty CEO Jack Chua says he is confident of going into the results season soon after listing.
Apac Realty CEO Jack Chua says he is confident of going into the results season soon after listing.

IPO to be priced at 66 cents apiece; plans to raise about $27m in net proceeds

ERA Realty, Singapore's second-largest real estate agency, is finally making a return to the public market after delisting in November 2012.

Apac Realty, which operates under the ERA brand, plans to raise net proceeds of about $27.1 million by selling shares at 66 cents apiece in an initial public offering (IPO) and subscription deal.

The IPO sale shares will comprise 4.8 million new shares and 44.1 million vendor shares, Apac Realty said in a prospectus for a listing on the Singapore Exchange (SGX) mainboard registered yesterday.

A separate tranche of about 39.3 million shares has already been taken up by cornerstone investors, comprising FIL Investment Management, Qilin Asset Management, Asdew Acquisitions and Azure Capital.

The amount raised for Apac Realty and its shareholder, Asia Pacific Realty Holdings, totals some $55 million in net proceeds.

ERA was listed on SGX through its holding company, Hersing Realty, in 1998. It was delisted in 2013 and sold for about $130 million by former parent Hersing Corp to private equity fund Northstar.

The IPO comprises a placement tranche of 44.5 million shares and a public tranche of 4.4 million shares. The public offer will close at noon next Tuesday. Trading is expected to commence next Thursday.

ERA Realty had 6,176 agents as of July, just behind PropNex, which became the largest agency here with 6,688 agents after merging with Dennis Wee Group in June.

Apac Realty's net profit in the first quarter was $4 million, doubling from $1.9 million in the same period last year. Chief executive Jack Chua told The Straits Times he is confident of going into the results season soon after listing. "The first quarter is usually not the best of the year," he said, since sales ease during the year-end holiday season and Chinese New Year and brokerage revenue is booked roughly two months after a buyer signs the option to buy.

"The property market is on the uptrend. That is really my advantage... When you talk to all these fund managers, they really can see that the market is picking up," he said.

Singapore contributed 99.9 per cent of group revenue last year. The firm intends to use the IPO proceeds to focus on regional expansion. It holds the ERA master franchise rights for 17 Asia-Pacific countries, but has a presence in only eight.

Mr Chua intends to use the IPO proceeds to buy over some sub-franchisees, in which the group holds very small stakes.

Expansion into new countries like China also creates a platform for referrals. Roughly 6 per cent of buyers here are foreigners, he said.

"In 2011, it was 18 per cent. It dropped because of ABSD (Additional Buyer's Stamp Duty), but people have already gotten quite used to ABSD and we are seeing more foreign buyers coming back."

The IPO shares will comprise 13.8 per cent of the total share capital post-IPO, or 16.5 per cent if the over-allotment option of 9.75 million shares is exercised in full.

Northstar and certain senior employees of Apac Realty will retain a 74.7 per cent stake post-IPO, or 72 per cent if the over-allotment option is fully exercised. DBS is the sole issue manager, bookrunner and underwriter for the IPO.

A version of this article appeared in the print edition of The Straits Times on September 22, 2017, with the headline 'ERA set for relisting on SGX under Apac Realty'. Print Edition | Subscribe