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ERA Realty to relist as APAC Realty; IPO at 66 Singapore cents per share
AHEAD of a perceived property upcycle in the horizon, the owners of Singapore's second largest property agency are seizing this window of opportunity to bring it back to the Singapore bourse.
ERA Realty Network is put up for an initial public offering (IPO) along with other related businesses under APAC Realty, which launched its IPO at 66 Singapore cents per share, the registered IPO prospectus shows.
APAC Realty chief executive officer Jack Chua, who has been helming ERA Realty as CEO, said that he hopes to channel more resources to beef up the Asia-Pacific network post-listing.
This will in turn benefit the brokerage business in Singapore through cross-selling as he sees a return of foreign buyers.
The IPO consists of 48.9 million shares - including 44.5 million shares to institutions via placement and 4.4 million shares to retail investors.
Concurrently, another 39.3 million shares will be sold to cornerstone investors Fidelity Investment, Singapore-based Azure Capital Pte Ltd, Soilbuild Group executive chairman Lim Chap Huat, and serial investor Wang Yu Huei.
There is a greenshoe option of 9.75 million shares. The retail offer closes next Tuesday, and trading of shares will begin on Sept 28. DBS is the sole issue manager, bookrunner and underwriter; RHB Securities Singapore is the sub-underwriter and placement agent.
APAC Realty's principal business is in wholly owned ERA Realty, now the second largest property agency here by agent strength with 6,272 agents as at the last count.
It also holds the exclusive regional master franchise rights to Realogy's ERA brand for certain countries in the Asia-Pacific region as well as the master franchise rights to Realogy's Coldwell Banker brand for Singapore. Another wholly owned subsidiary RIA provides training, valuation and property management services.
APAC Realty's largest shareholder Northstar Group acquired these businesses in August 2013 from the founder of Hersing Corporation - one year after the founder delisted Hersing, the listed company that held these businesses.
ERA Realty was top in agent strength for six consecutive years till it was overtaken by the merger of Dennis Wee Group and PropNex Realty in June, a move that brought PropNex's strength to 6,858 agents at last count.
Post-listing, Northstar Group and APAC Realty's management would retain 72 per cent in APAC Realty, if the greenshoe option is exercised in full. Northstar, a Singapore-headquartered private equity firm, is not looking to exit its investment anytime soon, Mr Chua said.
One overseas market that APAC Realty is eyeing now is China, where it is considering opening an office instead of appointing a franchisee.
To weather the property cycles better, Mr Chua said that he is looking to expand the non-brokerage business of APAC Realty, which made up 19.1 per cent of gross profit for fiscal 2016.