Daiwa House Logistics Trust seeks listing on SGX

DAIWA House Logistics Trust (DHLT), which will invest in logistics and industrial real-estate assets across Asia, is seeking a listing on the Singapore Exchange.

A preliminary prospectus lodged with the Monetary Authority of Singapore on Wednesday (10 Nov) says that the Reit's manager will offer nearly 244.44 million units at S$0.80 a unit for subscription, as part of an offering which will include a placement tranche and a public offer.

Each of the cornerstone investors have entered into separate subscription agreements to do so at the same price, for a total of 336.06 million units. Among the cornerstone investors are Bangkok Life Assurance Public Co, asset manager DWS Investments Australia, Kuang Ming Investments (an investment holding company privately owned by Philip Ng and family) and Metro Holdings' wholly-owned unit, Metro ARC Investments.

Similarly, sponsor Daiwa House Industry Co has entered into a subscription agreement in which it will subscribe for up to 94.5 million units at S$0.80 per unit, assuming that the over-allotment option is not exercised.

After the completion of the offering, the total number of outstanding units will be 675 million.

DHLT will have an initial portfolio of 14 logistics properties in Japan with a total net lettable area of 423,920 square metres (sq m) and a land area of 420,393 sq m. The purchase price will be 71.06 billion yen (S$840.5 million) - an 11.8 per cent discount to the appraised value of the portfolio of around 80.57 billion yen.

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As at Oct 1, the occupancy for the IPO portfolio was 96.3 per cent and the weighted average lease expiry (by occupied NLA) was 7.2 years as at June 30. The portfolio age is 3.7 years.

The prospectus says the manager intends to raise gross proceeds of about S$575.5 million from the offering, and the issuance of the sponsor's subscription units, the cornerstone units as well as perpetual securities. The funds will go towards purchasing the properties, issue expenses, other transaction costs and working capital, among other things.

DHLT "stands to benefit" from the sponsor's capabilities as one of the largest construction and real estate development firms in Japan, the prospectus said. In addition, the sponsor has granted the Reit the right of first refusal (ROFR) over its pipeline of assets in Japan and South-east Asia.

DHLT's forecasted and projected distribution per unit (DPU) yields for 2021 (annualised) and 2022 stand at 6.3 per cent and 6.5 per cent respectively.

Trading in the units is expected to commence on or about Nov 26.