Sasseur Reit IPO is more than 3.7 times subscribed

Singapore

THE initial public offering (IPO) of Sasseur Real Estate Investment Trust (Reit) attracted applications that represented more than 3.7 times the number of available units in the public tranche, ballot results on Tuesday showed.

The offering, which is priced at S$0.80 per unit, comprises 252.8 million placement units and a public tranche of 13.8 million units. For the public tranche, there were 2,832 valid applications for 51.4 million units that represented some S$41.1 million worth of valid applications.

The company said the placement tranche was oversubscribed by institutional investors.

Sasseur Reit, as Singapore's first Reit IPO this year, would raise S$396 million in gross proceeds through this listing this month. This makes it the largest IPO in Singapore to date this year.

Sasseur Reit will offer investors here exposure to Chinese outlet malls, being the first outlet mall Reit to be listed in Asia.

The Reit is forecasting a distribution yield of 7.5 per cent between March 1 and end-2018, and 7.8 per cent in 2019.

Its portfolio comprises four malls in Chongqing, Bishan, Hefei and Kunming. They have an average occupancy rate of 95.1 per cent and a net lettable area of 304,573 sq m.

These will be managed for 10 years by its manager, Sasseur Shanghai, a unit of sponsor Sasseur Cayman Holdings. Sasseur Group, the sponsor group, currently manages and operates nine retail outlet malls.

Sasseur Reit has also secured S$182.8 million from 12 cornerstone investors including a unit of Chinese e-commerce giant JD.com and CKK Holdings, which owns Charles and Keith. These represent 228.4 million units at the offering price, or 46.1 per cent of the total gross proceeds.

According to China Insights Consultancy, China's outlet mall industry is set to grow at a compound annual growth rate of 24.2 per cent between 2016 and 2021. Sales revenue of the outlet industry in China is projected to surpass the US to become the largest globally by 2030.

Units of Sasseur Reit will begin trading on the Singapore Exchange on Wednesday, at 9am.