Temasek-backed Mapletree launches $1.3 bln record REIT IPO

A real estate investment trust backed by Singapore state investor Temasek is betting on demand from yield-hungry investors to complete an up to $1.3 billion initial public offering, the largest ever IPO by a REIT in the city state.

Investors and bankers hope a successful offering by the REIT, Mapletree Greater China Commercial Trust, will be a harbinger for IPOs in Asia following a dismal 2012.

It will be the biggest IPO in Asia excluding Japan since the $3.1 billion listing of People's Insurance Company (Group) of China's (PICC) in late November, and comes ahead of some $2.5 billion of offerings for business trusts and REITs expected to take place in the coming months in Singapore.

"Overall it's quite attractive because of the strong sponsor, quality assets and yield," said Tan Siew Ling, an analyst at CIMB Research in Singapore. "Given the size of the deal, it will be closely watched because if it does well, it will give a positive signal to other players that might want to do similar IPOs."

Mapletree is offering about 1.73 billion units in a range of S$0.88-0.93 each, putting the total deal at up to S$1.6 billion ($1.3 billion), according to a prospectus of the IPO filed on Friday.

At that price range, the REIT has a projected yield of as high as 6 percent for the financial year ending in March 2014, and 6.5 percent in the following year, the prospectus said.

The projected returns compare with an average of 5.05 percent on retail REITs and 4.82 percent for office REITs listed in Singapore for the 12 months through the end of January, according to Asia Pacific Real Estate Association (APREA) data. In Hong Kong, retail REITs posted average yield of 4.6 percent, while office REITs had 5.46 percent in the same period.

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