More on Sabana REIT IPO

More on Sabana REIT IPO which is also going to be Singapore's first Shari'ah-compliant. Interested? Count me out. I have no interest in REIT whether or not it's Shari'ah compliant.

Sabana Shari'ah Compliant Industrial Real Estate Investment Trust (Sabana REIT) plans to raise up to S$696.1 million through an initial public offering (IPO), according to a prospectus it has filed with the Monetary Authority of Singapore (MAS).

Sabana said it plans to sell 632.8 million units, with each unit priced at between S$1 and S$1.10.

If successful, this would make it the first Shariah-compliant listing in Singapore.

The Singapore-based REIT invests mainly in industrial properties in Asia, as well as other real estate-related assets that are Shari'ah compliant.

The initial property portfolio of the REIT will comprise 15 industrial properties in Singapore with a gross floor area of around 3.9 million square feet.

According to agency reports, the roadshows for the IPO will start on Tuesday and the listing is planned for this month.

From Channel NewsAsia, "Sabana REIT files prospectus for Singapore IPO".

Update on 20/11: it's announced that the IPO for this REIT is at $1.05 per share.

SABANA Shariah Compliant Reit, which owns industrial properties in Singapore, has priced its IPO at $1.05 a share, the midpoint of an indicative range, to raise $491 million, IFR reported yesterday, citing sources.

Sabana Reit, Singapore's first Islamic Reit and the largest syariah-compliant property trust anywhere, is offering 605.8 million units in the initial public offering (IPO). It had originally set a price guidance of $1.00-$1.10.

The retail tranche of the IPO, which started later yesterday, will close on Nov 24 and the units will begin trading on Nov 26, IFR added.

Sabana controls 15 industrial properties in Singapore with an aggregate floor area of about 3.3 million square feet.

The manager of the Reit had forecast in a draft prospectus a distribution yield of 8.45 per cent for 2011 and 8.48 per cent for 2012 based on the minimum offer price of $1.00. FIL Investment Management Hong Kong, a unit of US fund manager Fidelity, and Bahrain's al-Salam Bank are among the cornerstone investors that will buy 101.8 million units in the IPO.

HSBC is the sole financial adviser for the IPO and is joint global coordinator, bookrunner and underwriter with United Overseas Bank and Daiwa.

From Business Times, "Sabana Reit IPO priced at $1.05 a share, to raise $491m".

Update on 26/11: not so impressive first day trading of this counter. It closed at $1.02. Lower than its IPO price of $1.05. It even hits the intraday low of $0.97!

The world's largest Shari'ah-compliant REIT by total assets opened to a sluggish start on its first day of trade in Singapore because of weak market sentiment.

Sabana Industrial Real Estate Investment Trust or Sabana REIT closed its first day of trade at S$1.02.

That's 2.8% lower than the IPO price of S$1.05.

While it may have been a tepid debut for Sabana REIT, some analysts said they expect strong appetite for such products in the future.

Sabana REIT's portfolio includes 15 industrial properties which are located in Singapore, where the manager of the REIT believes there is sustained demand for industrial properties.

HSBC is the sole financial adviser to the REIT, and it says this could be the first of many such listings in the market here.

HSBC's managing director and head of real estate advisory for Asia Pacific, Jason Kern, said: "I do think it will be a bit of a trend. I think what we have demonstrated through the execution of this IPO is that there is incremental demand out there for investors who don't normally invest in Singapore REITs.

"We have roughly 30% of the demand for this deal (from) brand new sources of capital.....the Middle East, Malaysia, Shari'ah compliant investors. So I think that's very powerful."

From Channel NewsAsia, "Sabana REIT makes weak debut".


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