SINGAPORE (Oct 1): Lendlease Global Commercial REIT has completed its initial public offering of 387.5 million units at 88 cents each, with the public tranche of 22.7 million units 14.5 times subscribed – the highest subscription rate for a Singapore REIT in five years.
Lendlease had received 13,640 valid applications under the public tranche, amounting to some 330.4 million units.
Units in Lendlease Global REIT are expected to commence trading on the Mainboard of the Singapore Exchange (SGX) at 2pm on Oct 2.
Indications of interest received for the placement tranche of 364.7 million units that was offered to institutional and other investors in Singapore translated to a subscription rate of 9.9 times. The 13 million reserved units were fully allocated.
Overall, the offering – comprising the public offering, placement tranche and reserve units – received total subscription valued at about $3.35 billion and was 9.8 times subscribed.
Separate from the offering, 13 cornerstone investors have subscribed to a total of 453.8 million units. These cornerstone investors include funds and accounts under management by investment management subsidiaries of BlackRock Inc, DBS Bank on behalf of certain wealth management clients, Fullerton Fund Management Company, Lion Global Investors, and Nikko Asset Management Asia.
At the same time, Lendlease SREIT, the trustee of an indirectly wholly-owned sub-trust of Lendlease Trust, has also separately entered into an agreement to subscribe to 318.1 million units of Lendlease Global REIT at the offering price.
A total of 1.17 billion units were issued, raising gross proceeds of close to $1.03 billion.
See: Singapore property trust IPOs surge to 6-year high
Based on the offering price of 88 cents per unit, Lendlease Global REIT forecasts a distribution yield of 5.8% for FY2020. The REIT also expects distribution yield growth of 3.6% y-o-y, to achieve a projected distribution yield of 6% for FY2021.
Lendlease Global REIT has an initial property portfolio of $1.4 billion, comprising 313 @ Somerset on Orchard Road and Sky Complex, a Grade A office in Milan, Italy.
“The strong support from cornerstone, institutional and retail investors underscores the strength of our high quality portfolio of stable cash flow generating commercial assets strategically located in two gateway cities with attractive retail and office markets,” says Kelvin Chow, CEO of the manager.
The way Chow sees it, the resilient portfolio “checks all the right boxes” to generate long-term stable distributions for unitholders.
“[The portfolio has] visible organic growth potential through built-in rental escalations and positive market dynamics, as well as inorganic growth from the support of our strong sponsor’s established platform whose development pipeline is approaching A$100 billion ($93.3 billion),” he adds.
Lendlease Global REIT’s sponsor, Australia-listed Lendlease Corporation, is one of the largest developers in the world, and manages funds of over A$35.2 billion.
