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Singapore Press Rises on Retail REIT’s Dividend: Singapore Mover

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Singapore Press Plans to Raise S$540 Million in Retail REIT IPO
Shoppers and pedestrians walk past the Paragon shopping mall on Orchard Road in Singapore. Photographer: Munshi Ahmed/Bloomberg

May 28 (Bloomberg) -- Singapore Press Holdings Ltd., the newspaper publisher that owns the Paragon mall along the city’s shopping belt, rose the most in almost two months after it said it will pay a one-time dividend from its property trust listing.

The stock climbed 1.8 percent to S$4.47 at the close in Singapore trading, its biggest gain since April 3. The company said yesterday it plans to raise about S$540 million ($427 million) from the initial share sale of a real estate investment trust that will include Paragon and the Clementi Mall in the island state’s western suburb.

The REIT is expected to list in early July, Chief Financial Officer Tony Mallek said in a briefing yesterday. The trust will buy Paragon and Clementi Mall for S$3.07 billion, and the company will pay a dividend of 18 Singapore cents, Singapore Press said.

“We expect initial share price reaction to be positive” as the one-time payout would amount to 75 percent of the dividend in the last fiscal year, Joshua Low, an analyst at DMG & Partners Research Pte, said in a report. “This would imply a boosting of fiscal year 2013 yield to 9.6 percent.”

The IPO comes after Mapletree Greater China Commercial Trust raised S$1.6 billion in February. REITs and business trusts have been the biggest fundraisers in Singapore’s IPO market in the past 12 months, accounting for almost 80 percent of the S$6.6 billion raised in the city, according to data compiled by Bloomberg.

Crystallizing Value

The trust “allows SPH to crystallize the value in Paragon and the Clementi Mall, and release capital to fund the group’s growth and the special dividend,” Singapore Press said in the statement, adding that it will hold about 70 percent of the retail REIT after it goes public.

The REIT will have a market value of S$2.2 billion, and will hold S$900 million of debt, the company said in its presentation slides.

Paragon, located along Orchard Road, and Clementi Mall are “fully leased,” Singapore Press said earlier this year.

In the year through August 2012, property accounted for 26 percent of Singapore Press’s operating income of S$466.9 million, while newspapers and magazines accounted for almost 71 percent, data compiled by Bloomberg show.

Singapore Press climbed 11 percent this year, compared with the 7.6 percent increase in the benchmark Straits Times Index.

To contact the reporter on this story: Pooja Thakur in Singapore at pthakur@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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