Sunday, October 14, 2012

Dynasty REIT IPO - Li Ka Shing linked to launch end October

Backed by Hong Kong billionaire Li Ka Shing, Dynasty REIT will be the first yuan denominated REIT IPO to be launched in the Singapore stock market.  The IPO of Dynasty REIT will be the largest in Singapore this year, surpassing that of Far East Hospitality Trust that was just launched in August 2012.

So far, the trust has secured two cornerstone investors: Credit Suisse AG and Amundi (a joint venture between Credit Agricole and SocGen).  Together, they have subscribed to 137.6 million units.  ARA plans to inject three Chinese commercial properties into Dynasty REIT's initial portfolio.  The REIT seems attractively priced at around 7% yield. In Singapore's low interest rate environment, this makes a feasible alternative investment.

Looking at Hui Xian REIT (also linked to Mr Li Ka Shing) which was launched earlier this year, the share prices have fallen ever since they were listed, falling more than 20% from its initial IPO price of CNY 5.24 to 4.02.

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