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Singapore Reits going on a record fundraising spree

Singapore

SINGAPORE real estate investment trusts (Reits) are back for more cash, pushing secondary share sales to record levels.

Keppel Pacific Oak US Reit launched a private placement of up to US$75.6 million on Thursday, a day after Mapletree Commercial Trust raised S$918.5 million through a private placement and a preferential offering.

Reits are proving popular among yield-hungry investors in Asia as central-bank easing has sent interest rates to rock bottom around the world.

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The Bloomberg Asia Real Estate Investment Trust Index has rallied 23 per cent this year, making it an opportune moment for the sector to issue new equity.

Surging investor demand has propelled fund-raising activity by Singapore Reits to levels never seen before. Their additional share sales have fetched US$2.3 billion this year, the most since at least 1999, data compiled by Bloomberg showed.

Earlier this month, Lendlease Global Commercial Reit staged a successful debut in Singapore, surging 6.3 per cent at the open from its offer price, the biggest jump among Singapore's Reits in the past six years. Investors piled in, putting in orders for more than 9.8 times the shares on offer.

Meanwhile, Mapletree Commercial Trust said its private placement was approximately seven times covered, highlighting the strong demand.

The Reit sector was the top institutional net buy for the first eight months of the year, drawing inflows of S$211 million, Singapore Exchange chief executive officer Loh Boon Chye said at a speech during the Lendlease IPO ceremony.

The performance of follow-on offerings by Singapore Reits has been strong too, with just one of this year's deals - CapitaLand Commercial Trust - trading below its offer price.

The deals this year have returned 9.2 per cent on average, with initial public offerings raising US$1.59 billion, a six-year high, data compiled by Bloomberg showed. BLOOMBERG