Dynasty seeks up to $1b in dual-currency Singapore IPO

Dynasty Real Estate Investment Trust, an investor in Chinese property backed by ARA Asset Management, is seeking as much as 5.4 billion yuan ($1 billion) in the first dual-currency initial public offering in Singapore.

Dynasty REIT plans to offer as many as 901.3 million units at 4.40 yuan to 4.70 yuan apiece, according to a prospectus filed with the Monetary Authority of Singapore yesterday. At the high end of the range, the REIT also plans to sell about 108.8 million units to Singapore-based ARA, while about 137.6 million units will be sold to so-called cornerstone investors, the prospectus shows.

The shares will be traded in both yuan and Singapore dollars, while Dynasty REIT will publish its financial statements in yuan, according to the document.

ARA is backed by billionaire Li Ka-shing, whose Hui Xian Real Estate Investment Trust remains the only stock denominated in the currency outside mainland China. Offering investors the chance to trade shares two currencies may boost appetite for Dynasty REIT’s IPO, after the yuan fell 2.9% against the Singapore dollar in the past year.

Yuan deposits in Hong Kong declined in August to the lowest level since May 2011 as weakened expectations for yuan appreciation offset new rules allowing non-residents to purchase the Chinese currency. Hui Xian has dropped 23% from its offer price of 5.24 yuan in April 2011.

Dynasty REIT, which is backed by commercial properties in the cities of Shanghai, Nanjing and Dalian, will invest in commercial real estate properties in China, according to the sales document. Standard Chartered Plc, DBS Group Holdings and Macquarie Group are managing the offering.

Dual Currency
Singapore Exchange has allowed securities including stocks and exchange-traded funds to be listed in two currencies since April. Hutchison Port Holdings Trust, which completed an IPO denominated in the US currency in March last year, started trading in both US and Singapore dollars on April 2 of this year.

In Hong Kong, Meilan International Holdings, a Chinese chemical producer, plans to raise more than US$100 million ($123 million) in what may be the city’s first dual-currency IPO, two people familiar with the matter said in August.

Singapore’s bourse said in July it plans to start listing securities denominated in the Chinese currency as it seeks to boost its position as an offshore yuan centre.

Depositors in Singapore hold about 60 billion yuan, the Straits Times newspaper reported in June, citing Ong Chong Tee, deputy managing director at the Monetary Authority of Singapore. Savings in Hong Kong fell 1.9% from the previous month to 552 billion yuan, the Hong Kong Monetary Authority said on Sept. 28. That’s down from a record 627 billion yuan at the end of November.