Frasers Logistics REIT Opens 1.7% Higher in Singapore Debutby and
Trust is backed by Frasers’ Australian industrial properties
Frasers raised S$903 million in largest REIT IPO since 2013
Frasers Logistics & Industrial Trust, a real estate investment trust backed by Frasers Centrepoint Ltd., opened 1.7 percent higher on its first day of trading in Singapore after raising the most in an initial share sale in the city-state in three years.
The units opened at 90.5 Singapore cents apiece at 9 a.m. local time, compared with the offering price of 89 Singapore cents. Indications of interest from institutional investors outstripped the number of units available by six times, the company said in a statement on June 17. The units offer a 6.83 percent annualized yield for the period from June 1 to Sept. 30 and a 7.3 percent yield for the year ending Sept. 30, 2017, according to the statement.
Frasers Logistics’ debut gives a boost to the Singapore bourse, which saw listings fall to $366 million in 2015, a fraction of the $2.6 billion priced the year before, according to data compiled by Bloomberg. At S$903 million ($672 million), the Frasers IPO is the biggest first-time share sale in the city-state since Asian Pay Television Trust raised about S$1.4 billion in 2013, the data show.
The offering attracted 15 cornerstone investors, including Morgan Stanley’s investment management unit, Lion Global Investors Ltd., DBS Bank Ltd. and JF Asset Management Ltd. They have collectively agreed to subscribe to about 49 percent of the deal. DBS and Citigroup Inc. were the global coordinators for the sale.
The 51 properties in the trust consist of assets acquired when Frasers Centrepoint, controlled by Thai billionaire Charoen Sirivadhanabhakdi, bought Australand Property Group in 2014. The company’s Australian operations were its biggest revenue contributor in the year through September 2015, accounting for 44 percent of sales, data compiled by Bloomberg show.
It will be the first Singapore-listed REIT with an initial “pure-play Australian industrial portfolio,” with properties in the major capital cities of Melbourne, Sydney and Brisbane, as well as Adelaide and Perth, according to the June 17 statement.
Frasers Centrepoint, which had S$23.1 billion of total assets last year, develops and invests in property in Singapore, Australia and China, according to its website. It has already formed REITs in the hospitality, commercial and retail sectors.