Reits should give retail investors bigger bite in IPOs and placements

LAST year began as a fairly quiet year for new listings of real estate investment trusts (Reits) on the local bourse. But it ended with a bang as Digital Core Reit (DC Reit) made its trading debut on Dec 6, 2021.

On its first day of trading, the pure play data centre trust - with a portfolio of 10 freehold data centres in the United States and Canada - closed at US$1.01. That was 15 per cent above its initial public offering (IPO) price of US$0.88. By end-2021, DC Reit was up 32 per cent from its IPO price.

Unfortunately, many retail investors failed to get a slice of DC Reit at its IPO. The public offer tranche ended with subscriptions of 16.1 times the value of units on offer. One in two applicants in the public offer tranche received zero allocation, while most successful applicants received a fraction of what they applied for.