Mapletree Said to Plan REIT Pricing at Top End of Range

Mapletree Investments Pte plans to sell shares in an initial public offering of a real estate investment trust at the top end of a marketed range, raising about S$1.6 billion ($1.3 billion), said three people with knowledge of the matter.

Mapletree Greater China Commercial Trust, backed by assets in Hong Kong and China, will be priced at 93 Singapore cents a share, the people said, asking not to be named as the process is private. The shares had been offered at 88 cents to 93 cents.

Trusts have dominated Singpore’s IPO market in recent years as high-yielding assets gained popularity amid low interest rates. Previous IPOs by Mapletree Investments have fared well, with Mapletree Industrial Trust and Mapletree Commercial Trust advancing about 50 percent from their offer prices, while Mapletree Logistics Trust is up more than 70 percent, data compiled by Bloomberg show.

Mapletree Greater China will include the Festival Walk shopping mall in Hong Kong and Gateway Plaza office complex in Beijing, a sales document for the IPO shows. The sale will be the biggest IPO of a real estate investment trust in Singapore, surpassing the previous offerings by Mapletree, a real estate unit of Temasek Holdings Pte.

Final pricing will be announced before the public offer opens on Thursday, Mapletree Investments said in an e-mailed response to questions.

Expected Yield

At 93 Singapore cents, Mapletree Greater China Commercial Trust is expected to pay a distribution yield of 5.6 percent for fiscal 2013, and 6.1 percent for the following 12 months. Shopping mall operator CapitaRetail China Trust has an indicated yield of 5.3 percent, while Link REIT yields 3.38 percent, data compiled by Bloomberg show.

Singapore REITs have outperformed the city-state’s Straits Times Index this year, returning 4.6 percent compared with a 3.3 percent gain in the benchmark.

Mapletree Industrial Trust completed a $754 million initial share sale in April 2011 and Mapletree Industrial Trust raised $714 million in October the previous year. Mapletree Logistics Trust raised $144 million in 2005.

Gross proceeds from Mapletree Greater China’s offering could be as much as S$1.68 billion if a so-called over-allotment option is exercised, according to the company’s share-sale prospectus. Mapletree Investments will own 32 percent to 35 percent of the REIT after the sale.

About 953 million of the 1.7 billion shares will be sold to so-called cornerstone investors, including AIA Group Ltd. and Morgan Stanley, according to a prospectus filed with the city-state’s central bank on Feb. 15. Also among cornerstone investors are Henderson Global Investors Ltd., Myriad Asset Management Ltd. and Norges Bank Investment Management, which runs Norway’s sovereign wealth fund, the sales document shows.

Citigroup Inc., Goldman Sachs Group Inc., DBS Group Holdings Ltd. and HSBC Holdings Plc are managing the offer.

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