MAPLETREE Greater China Commercial Trust, Asia's biggest share sale this year, was 29.5 times oversubscribed as assets, including the Festival Walk shopping mall in Hong Kong, offered higher returns than comparable properties.
The property trust, which starts trading in Singapore at 2pm today, raised S$1.6 billion (RM4 billion), offering shares at S$0.93 apiece.
The price reflects a 5.6 per cent yield for the year ending March 2014, compared with the 4.2 per cent return for the Bloomberg Asia REIT Index.
"The REIT has an attractive yield compared to other REITs with assets in Hong Kong or China," said Vijay Natarajan, a Singapore-based analyst at UOB-Kay Hian Pte. "Mapletree is a trusted brand with a strong track record and its last REITs have done well."
The trust is the fourth by Mapletree Investments Pte, a property unit of Temasek Holdings Pte, Singapore's state-owned investment company. Mapletree Industrial Trust and Mapletree Commercial Trust have advanced about 50 per cent from their offer prices, while Mapletree Logistics Trust is up more than 70 per cent, according to data compiled by Bloomberg.
Trusts have dominated Singapore's IPO market in recent years as high-yielding assets gained popularity amid low interest rates.
A total of 30 REITs and property trusts were listed in the city-state with a combined value of S$56 billion, making up six per cent of the total market capitalisation of stocks traded, Lawrence Wong, head of listings at the Singapore Exchange Ltd, said in a statement on February 27.
"The REIT's properties are located in some of the best shopping and business areas in Chinese cities, which are offering strong growth prospects," said Tata Goeyardi, a Singapore-based analyst at Religare Capital Markets. "The REIT offers an attractive yield."
Mapletree Greater China will include the Gateway Plaza office complex in Beijing, a sales document for the IPO showed. The sale was the biggest IPO of a real estate investment trust in Singapore.
Mapletree Investments will own about a third of its newest REIT after the sale.
About 953 million of the 1.7 billion shares were sold to so-called cornerstone investors, including AIA Group Ltd and Morgan Stanley. Bloomberg