SINGAPORE – Elite Commercial Real Estate Investment Trust (Reit) lodged its preliminary listing prospectus on Friday (Jan 17), positioning it to be the first initial public offering (IPO) for a trust this year.
It will also be the first Reit denominated in British pounds to list here.
This is in line with a slew of foreign commercial Reits, four of which listed here last year – ARA US Hospitality Trust, Eagle Hospitality Trust, Prime US Reit and Lendlease Global Commercial Reit.
Elite Commercial Reit Management, the trust’s manager, registered the preliminary prospectus with the Monetary Authority of Singapore.
It stated that the sponsors are Elite Partners Holdings (EPH), the investment holding firm for Elite Partners Group, Ho Lee Group and Sunway RE Capital, a wholly-owned subsidiary of Sunway, one of Malaysia’s largest conglomerates.
The Reit has an initial portfolio comprising 97 mainly freehold properties in Britain with a total appraised value of £319.1 million.
A quarter of the properties – by rental income – are in London, with the rest in second- and third-tier cities across Britain, including Glasgow and Cardiff.
They have a total net internal area of 2.6 million sq ft, and a total site area of about 47 hectares.
More than 99 per cent of the gross rental income is derived from leases with the British government.
The manager believes that the IPO portfolio provides an “attractive risk-adjusted return compared against (British) government 10-year bonds. It provides a net property income yield of 7.1 per cent”.
The cornerstone investors are certain private banking clients of UBS, Bank of Singapore and CIMB Bank.
The total IPO proceeds and issuance of the cornerstone units will be used towards partial repayment of loans, redeeming a number of the private trust units, payment of transaction costs and working capital.
Distributions to unitholders, which will be declared in British pounds, will be computed based on 100 per cent of Elite Commercial Reit’s annual distributable income for the period from the listing date to the end of 2021.
The reit will then distribute at least 90 per cent of its annual distributable income semi-annually. The first distribution – based on the period from the listing date to June 30 – will be paid by Sept 30.
OCBC Bank and UBS are the joint issue managers. The joint bookrunners and underwriters are OCBC, UBS, CGS CIMB and China International Capital Corporation.