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Lendlease Group seeks to list Reit on SGX to raise S$1.03b

Some 387.5 million units of Lendlease Global Commercial Reit will be offered in the IPO at S$0.88 per unit

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The Reit will initially consist of retail mall 313@somerset (above) in Singapore and an office complex in Milan, Italy.

Singapore

SYDNEY-headquartered Lendlease Group has lodged a prospectus to list a new Reit (real estate investment trust) on the Singapore Exchange (SGX) mainboard.

About 387.5 million units of Lendlease Global Commercial Reit will be offered under the initial public offering (IPO) at S$0.88 per unit. The Reit's manager, Lendlease Global Commercial Trust Management Pte Ltd, intends to raise gross proceeds of about S$1.03 billion, which will pay for the costs of the IPO, the acquisition of the properties and working capital.

The Reit will initially consist of leasehold retail mall 313@somerset in Singapore and freehold office property Sky Complex, which is made up of three office buildings in Milan, Italy. The Reit's portfolio has an appraised value of about S$1.41 billion.

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Based on the Reit's unaudited pro forma balance sheet, net asset value per unit as at the proposed listing date will be S$0.8134. Net property income is projected at S$47.9 million for 2020 and S$65.8 million for 2021.

Projected distributable income is forecast at S$44.9 million for 2020 and S$62.7 million for 2021. The Reit's distribution per unit is forecast to be 3.82 Singapore cents, which translates to a distribution yield of 5.8 per cent, for 2020.

The 2020 forecast annualises the Reit's remaining active period of nine months from Oct 1, 2019 to June 30, 2020, as it lists on Oct 2.

The public offer opens on Sept 25 at 9pm and closes on Sept 30 at 12pm. The minimum initial subscription for applications is 1,000 units. Placement tranche units are offered through an international placement including Singapore and excluding the US.

DBS Bank Ltd and Citigroup Global Markets Singapore Pte Ltd are the joint global coordinators, bookrunners and underwriters.

There will be a concurrent cornerstone offering to cornerstone investors AEW Asia Pte Ltd, Asdew Acquisitions Pte Ltd, BlackRock Inc, DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd, Fullerton Fund Management Company Ltd, Lion Global Investors Limited, Moon Capital Management LP, Nikko Asset Management Asia Limited, Principal Asset Management (S) Pte Ltd (formerly known as CIMB-Principal Asset Management), Soon Lee Land Pte Ltd, The Segantii Asia-Pacific Equity Multi-Strategy Fund and TMB Asset Management Co Ltd.

They will subscribe for a total of 453.8 million units at the offer price, for a total of about S$399.3 million.

Separately, Lendlease SREIT Pty Limited, in its capacity as trustee of LLT Sub-Trust, an indirectly wholly owned sub-trust of Lendlease Trust, will subscribe for 318.1 million units at the offer price for a total of about S$280 million. This will be equal to 27.2 per cent of the total number of units in issue as at the proposed listing date of Oct 2.

The Lendlease Group is an international property and infrastructure group, with operations in Australia, Asia, Europe and the Americas.

It has a portfolio of 21 urbanisation projects across 10 cities including Singapore, Sydney, Melbourne, Kuala Lumpur and Milan.

In July 2019, the Lendlease Group secured a project to develop three mixed-use communities in the San Francisco Bay Area in conjunction with Google.

A report in March had tipped Lendlease Group to list its Reit on the Singapore Exchange to raise US$500 million.

The last three property-based SGX IPOs were Prime US Reit, Eagle Hospitality Trust and ARA US Hospitality Trust, which made their debuts on July 19, May 24 and May 9 respectively. (see amendment note)

Amendment note: A previous version of this article wrongly stated that Eagle Hospitality Trust and ARA US Hospitality Trust were the last two property-based SGX IPOs before Lendlease. A change has been made to include Prime US Reit.