One of the largest proposed initial public offerings (IPO) in three years got off to a solid start, going by allocation figures released last night.
The IPO of Frasers Logistics and Industrial Trust (FLT) of about 521.75 million units at 89 cents each has been subscribed by more than six times, including public and placement tranches.
The public offer of 80 million units, which closed on Thursday, was 3.9 times subscribed, while the placement tranche of about 441.75 million units was over six times subscribed.
The counter will debut on Tuesday morning, making it only the second mainboard listing this year.
Together with commitments from 15 cornerstone investors of about 492.86 million units, a total of 1.015 billion units were issued to raise gross proceeds of about $903 million.
It is a stronger showing so far than this year's other listing, Manulife US Reit, which raised gross proceeds of about US$519.2 million (S$701 million) with units priced at 83 US cents.
Manulife's public tranche was about 1.6 times subscribed while placement and cornerstone tranches were fully subscribed. However, it ended its first day of trading at 79 US cents and was still underwater yesterday, closing at 81 US cents.
The turnout for FLT was within expectations, analysts said.
Institutional investors could have preferred FLT amid fears of a rate hike by the US Federal Reserve, said Mr Ivan Looi, investment analyst at RHB Research Institute.
"Since Manulife US Reit's assets are US-centric, it would be more sensitive to a rate hike as compared with FLT," said Mr Looi.
FLT's weighted average lease expiry term and income contribution are also more stable than those of Manulife US Reit, he noted.
Its other virtues include a guaranteed 3 per cent to 4 per cent organic growth given built-in fixed rental escalations and potential 3 per cent organic growth from call-option agreements that will allow FLT to acquire three properties from sponsor Frasers Centrepoint, said Mr Tata Goeyardi, director of Asean sales at Religare Capital Markets.
Mr Robert Wallace, chief executive officer of the Reit manager, yesterday called the demand from institutional and retail investors "a strong reflection of confidence in FLT's unique investment proposition as Singapore's first initial pure-play Australian industrial Reit."