Lendlease Global Commercial Reit's public tranche 14.5 times taken up

Singapore

THE Lendlease Global Commercial Reit's (real estate investment trust) initial public offering (IPO) has ended with its public offer tranche 14.5 times subscribed, the Reit's manager announced on Tuesday night.

Its units are expected to start trading on the Singapore Exchange's mainboard at 2pm on Oct 2.

Lendlease had offered 387.5 million units at S$0.88 each. Of this, 22.7 million units were offered to the public, with 13,640 valid applications for 330.4 million units received. The subscription rate of 14.5 times was the highest for a Singapore Reit in the last five years, said the manager.

Indications of interest received for the placement tranche of 364.7 million units translated to a subscription rate of 9.9 times, with 13 million reserved units fully allocated.

Separately but in conjunction with the IPO, 13 cornerstone investors have subscribed for a total of 453.8 million units. These include BlackRock Inc, Fullerton Fund Management Company, Lion Global Investors, Nikko Asset Management Asia, AEW Asia, Principal Asset Management and TMB Asset Management Co.

A total of 1.17 billion units was issued, raising gross proceeds of S$1.03 billion.

Based on the offer price of S$0.88 per unit, Lendlease Global Reit has a distribution yield of 5.8 per cent for the forecast year 2020 and an expected distribution yield growth of 3.6 per cent to 6 per cent projected for 2021.

Said the Reit manager's chief executive officer Kelvin Chow: "The strong support from cornerstone, institutional and retail investors underscores the strength of our high quality portfolio of stable cash flow generating commercial assets."

The Reit's IPO portfolio has an appraised value of S$1.4 billion and an aggregate net lettable area of 1.3 million sq ft, comprising Orchard Road mall 313@somerset and Sky Complex, a Grade-A office property with three buildings in Milan, Italy.

Mr Chow said the portfolio has "visible organic growth potential through built-in rental escalations and positive market dynamics" and inorganic growth from the support of its sponsor, Lendlease Corporation, whose development pipeline is approaching A$100 billion. The sponsor is part of Australia-listed property and infrastructure group Lendlease Group.