New Frasers Reit over six times subscribed
Singapore
AUSTRALIAN industrial property play Frasers Logistics & Industrial Trust (FLT) will make its mark as the hottest major initial public offering (IPO) in town this year.
The offering, which closed on Thursday, was over six times subscribed, drawing keen demand from institutional investors and to a lesser extent by members of the public.
Some S$903 million was raised, making it only the second IPO on the Singapore Exchange (SGX) mainboard year-to-date after Manulife US Reit raised US$470 million in May for three office buildings in the US.
Last year, the only mainboard listing was also another real estate investment trust (Reit) with foreign assets - BHG Retail Reit, which owns Chinese malls and raised S$276 million.
FLT on Friday said it completed its IPO of 521.7 million units at S$0.89 each. The offering price is at a 2.7 per cent premium to net asset value per unit.
Interest from institutional investors amounted to over S$2.5 billion, over six times the 436.1 million units on offer. Another 5.6 million reserved units were allocated.
The 80 million units on offer to the public was 3.9 times subscribed. Combined with 492.9 million units placed out to cornerstone investors, a total of 1.01 billion units were issued.
The typical public applicant who wanted 10,000 to 20,000 units was allocated 5,000 units.
Based on the offer price, FLT offers a forecast annualised yield of 6.8 per cent for the financial year ended Sept 30.
It has a projected yield of 7.3 per cent next year, assuming it exercises call options to acquire three more properties. Without exercising the options, its projected yield is 7 per cent.
Aggregate leverage is 25.7 per cent.
Three-fifths of the IPO portfolio are freehold assets, with 30 per cent of assets as leasehold with more than 80 years remaining.
The IPO portfolio has 51 properties with 68 tenants and an occupancy rate of 98.3 per cent. It has a weighted average lease expiry of 6.9 years. By appraised value, most properties are aged 10 years and under.
Trading is expected to begin on Tuesday, June 21, at 9am.
