Mapletree Greater China REIT Shines on Debut

Mapletree Greater China Commercial Trust (MGCCT) debuted on the Singapore Exchange Thursday at S$1.02 apiece, nearly 10 per cent over its initial public offering (IPO) price of 93 S-cents per unit.

More than 36 million units changed hands when it started trading at 2 pm, landing it among the top 20 most active counters. On its first day, the REIT closed 10.75 per cent higher than its IPO price at S$1.03 each.

“Being listed on SGX is a milestone for us, and we are especially pleased to be the largest Singapore REIT IPO to-date,” said Cindy Chow, Chief Executive Officer of Mapletree Greater China Commercial Trust Management Ltd, the manager of MGCCT.

According to the trust manager, 2.63 billion units have been issued, including 776.6 million through the initial public offering, as well as 931.6 million to subsidiaries of the sponsor Mapletree Investments, and 953.5 million more to cornerstone investors.

The cornerstone investors are AIA Group, Morgan Stanley, Henderson Global Investors, Myriad Asset Management Ltd and Norges Bank Investment Management, which runs Norway’s sovereign wealth fund.

Altogether about S$2.43 billion in net proceeds were raised.

The REIT is expected to pay a distribution yield of 5.6 per cent to 6.0 per cent in the first full financial year from 1 April 2013 to 31 March 2014 based on the offering price range.

Travis Seah, investment analyst Phillip Securities, said in a note that Mapletree Greater China’s projected yield is “a tad higher” than those of Fortune REIT and CapitaRetail China Trust, which has a forward yield of 5.3 per cent.

“The management fee structure is based on distributable income and DPU growth which will greatly align investors’ interest especially when acquiring good quality property assets,” he said.

MGCCT invests in a diversified portfolio of commercial real estate in Greater China, including Hong Kong, Beijing, Shanghai, Guangzhou and Shenzhen. Its initial portfolio comprises two commercial properties, namely, Festival Walk in Kowloon, Hong Kong and Gateway Plaza in Beijing.

With an estimated market capitalisation of S$2.5 billion, MGCCT brings the total number of SGX REITs and property trusts to 31 with a combined market capitalisation of S$58.0 billion.

Singapore is a regional hub for REIT listings, and Mapletree Greater China Commercial Trust is Mapletree Investments’ fourth REIT.

Mapletree Investments, the real estate arm of Temasek Investments, owns and manages a S$19.9 billion portfolio that includes office, logistics, industrial, residential and retail assets across Asia. It also manages three private real-estate funds.

The IPO pipeline in the citystate is expected to be healthy in 2013 after it slumped to around S$4.5 billion last year, less than half of the S$9.4 billion raised in 2011.