Mapletree Commercial to raise $893.2m in offer: Update

Mapletree Commercial Trust, the owner of properties including Singapore’s VivoCity shopping mall, raised $893.2 million in an initial public offering.

Mapletree Commercial sold securities at $0.88 per unit, having marketed them to investors at $0.84 to $0.91 each, according to an e-mailed media statement. The trust, a unit of Mapletree Investments, owned by Singapore state investment firm Temasek Holdings, delayed its initial public offering in the city last month because of volatile markets.

 

The sale offers a “unique exposure to prime assets in Singapore, a stable and resilient portfolio and an unparalleled platform for growth,” Amy Ng, chief executive officer of the trust’s manager, said at a briefing in Singapore today. If an over-allotment option is fully exercised, about $983 million will be raised, she said.

 

Mapletree Commercial is selling shares after Singapore’s record economic growth drove office and retail rents higher for at least three straight quarters, rebounding from a decline in 2009. The benchmark Straits Times Index, which lost as much as 4.5% in the week after Japan’s strongest earthquake on March 11, has since recovered and exceeded the levels before the temblor.

 

RISING YIELD

The final price of $0.88 translates to a distribution yield of about 5.7% for the financial year to March 2012, based on the trust’s own dividend estimate of 4.98 cents per unit, according to the statement. The distribution yield will grow to 6.2% the following year.

 

The forecast yield growth does not take into account any future acquisitions the trust may make, nor any enhancement of existing assets such as Vivocity, Ng said.

 

Mapletree Commercial may grow its portfolio by 5.1 million square feet of net lettable assets, worth about $3 billion, to 6.9 million square feet under the right of first refusal agreement it has with Mapletree Investments, she said.

 

Of the total offering, about 30% went to four cornerstone investors — AIA Group, Hillsbro Capital, Itochu Corp. and NTUC FairPrice Co-operative — who purchased a combined $266 million, according to the statement. The largest was Asian life insurer AIA, which bought about $121 million of units and will hold 7.4% of the trust at the time of listing.

 

VIVOCITY

About 16% of units have been reserved for Singapore retail investors who will be able to subscribe through a separate offering that opens tomorrow and runs until April 25, the statement said. The units will start trading on April 27 and the sale was managed by Citigroup Inc., DBS Group Holdings , Goldman Sachs Group Inc., Deutsche Bank AG and CIMB Group Holdings Bhd.

 

VivoCity is the trust’s biggest asset, making up 76% of its revenue. Funds raised from the unit sale will be used to buy Bank of America Merrill Lynch HarbourFront and PSA Building, two office developments in the southern part of Singapore owned by Mapletree Investments.

 

Vivocity attracted 43.6 million visitors in 2010, a 9.9% increase on 2009, while retail sales grew by 12.3% to US$741.7 million ($923.8 million), Ng said.

 

Separately, Mapletree Investment Group Chief Financial Officer Wong Mun Hoong said at the briefing today that the company’s China fund isn’t mature enough for an initial public offer in the near term.