Croesus Retail Trust, which holds shopping malls in Japan, gained on its first day of trading day as investors turn to higher-yielding assets.
The shares rose 23 percent to S$1.145 at the close of trading in Singapore, from the 93 Singapore cents offer price. They started trading at 2 p.m. and the share sale was 22.4 times subscribed. Croesus Retail is backed by Japan’s Daiwa House Industry Co. and Marubeni Corp., which have contributed assets to the trust.
Business and property trusts have dominated Singapore’s IPO market in the past year as high-yielding assets gained popularity amid low interest rates. REITs raised S$4.2 billion ($3.4 billion), or 69 percent, of the S$6.1 billion of stock sold in Singapore IPOs in the past 12 months, according to data compiled by Bloomberg. The measure tracking REITs in Singapore offers a 4.3 percent dividend yield, compared with 2.9 percent for the Straits Times Index.
“This type of yield is very attractive in this environment,” said Vikrant Pandey, a Singapore-based analyst at UOB Kay Hian Pte. “There is some interest coming from the Japanese side as well so vehicles that have exposure to Japan are also in favor.”
Croesus Retail’s holdings were valued at about 52.5 billion yen ($531.2 million) as of March, the business trust said. The assets include Aeon Town Moriya, Aeon Town Suzuka, Luz Shinsaibashi and Mallage Shobu. The properties have about 180,622 square meters (1.9 million square feet) of leasable space, according to the trust.
The trust plans to invest in retail properties in the Asia-Pacific region, with the initial Japanese assets providing stable income, it said.
The REIT gauge rose 37 percent in 2012 and has gained 13 percent this year, compared with the 8 percent advance in the benchmark Straits Times Index in 2013.
Citigroup Inc. and DBS Group Holdings Ltd. managed the offering.