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Elite Commercial Reit's Singapore IPO to raise up to £131.2m

THE offer price for UK-focused Elite Commercial Reit's proposed Singapore initial public offering (IPO) has been set at £0.68 per unit.

This will raise around £119.5 million (S$209.3 million) to £131.2 million, based on a total offering size of 175.7 million to 192.9 million units, according to a term sheet on Monday seen by The Business Times.

The IPO's Singapore public offer will run from Jan 28 to Feb 4, and is expected to raise "at least" £3.3 million to £3.9 million, equivalent to some 3 per cent of the total offering size, the term sheet stated.

Meanwhile, the placement tranche of £63.2 million to £74.3 million - more than half of the offering size - will be available to international investors outside the US.

The cornerstone tranche comprises some £52.9 million or up to 44.3 per cent of the offering, already committed by the cornerstone investors - Bank of Singapore, CIMB Bank Berhad Singapore Branch and UBS AG Singapore Branch, on behalf of their private banking clients.

The real estate investment trust (Reit) is expected to list on the Singapore bourse's mainboard on Feb 6, with a market cap of about £214.5 million to £226.2 million.

If things go as planned, Elite Commercial Reit will be the first Reit denominated in British pound to be listed in Singapore.

It has an initial portfolio of 97 properties across the UK, all of which are freehold except one.

There will be an over-allotment option of up to 6.6 million units or up to £4.5 million. The exercise of this option will not increase the total number of units in issue post-IPO.

The indicative distribution yield is forecast at 7.1 per cent to 7.4 per cent for fiscal 2020, according to the term sheet.

If the float is successful, Elite Commercial Reit's leverage at listing is estimated at 33.4 per cent to 37.2 per cent.

The first distribution will be for the period from the listing date to June 30, 2020, to be paid by Sept 30, 2020. Unitholders can opt to receive their distributions in British pounds or Singapore dollars.

The Reit's preliminary prospectus, lodged on Friday, did not contain details of the offer price or issuance size.