BHG Retail Reit opens at S$0.805, against IPO price of S$0.80

UNITS of Chinese mall owner BHG Retail Reit opened on Friday at S$0.805, up 0.63 per cent from its initial public offering (IPO) price of S$0.80 apiece. When the market closed, the units had settled back at S$0.80.

It has raised S$120.94 million from the IPO, plus another S$273.24 million from extra units subscribed to by the Reit sponsor Beijing Hualian Department Store Co, some cornerstone investors and a unit of Beijing Hualian Group. This brings the total funds raised to S$394.2 million.

It said that its placement tranche of 143.17 million units was "fully subscribed", though it did not say how many times the offering was subscribed - a multiple that would otherwise show off the popularity of the issue.

The underwriter for IPO, DBS Bank, will exercise its entire over-allotment option and sell an extra 24.63 million units. These over-allotment units offered under the greenshoe option were borrowed from a unit of the Reit sponsor. Underwriters can boost the price by buying up units when they trade below the offer price. They then return the units to the lender.