Morgan Stanley Private Equity Asia (MSPEA) is acquiring 59.8% of Singapore Exchange-listed APAC Realty for $129.5 million, or 61 cents per share, marking its first investment in the real estate services sector in Southeast Asia.
The 59.8% shares are to be acquired from Asia Pacific Realty Holdings, an entity controlled by the Northstar Group, a Singapore headquartered private equity firm.
At the transacted price of 61 cents, that's a significant discount off APAC Realty's current share price of 80.5 cents.
As a result of the transaction between MSPEA and Northstar, which crossed the 30%-mark, a mandatory general offer has been triggered for other APAC Realty shareholders to consider if they want to also sell their shares.
However, as the offer will be valid after APAC Realty goes ex-dividend, where four cents per share will be paid, the offer price for the remaining APAC Realty shareholders will be 57 cents.
APAC Realty is one of the leading real estate services providers, holding the exclusive ERA regional master franchise rights for 17 countries in Asia Pacific. Through its ERA franchisee network, the group has one of the largest brand footprints in Asia with more than 20,000 advisors across 653 offices and through its wholly owned subsidiary, ERA Realty Network, is one of Singapore’s largest real estate agencies.
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“We are delighted to invest in APAC Realty and look forward to working closely with its highly regarded professional management team to support the company as it continues on its trajectory as a leading real estate brokerage business in Asia," says Andrew Hawkyard, co-chief investment officer of MSPEA, managing director of Morgan Stanley and director of the offeror.
"The company has a proven 40-year track record running the business in Southeast Asia with over 20,000 dedicated advisors providing outstanding property brokerage services to its clients," he adds.
Morgan Stanley Private Equity Asia is the private equity arm of Morgan Stanley in Asia. For close to 30 years, MSPEA has been making private equity investments in Asia.
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Marcus Chu, CEO of APAC Realty (picture) says his new shareholder has an outstanding track-record and reputation in Asia and he is confident they will be an "excellent new partner".
"The company’s lead-generation and our team of advisors will benefit from MSPEA’s substantial networks and access to industry insights, which could facilitate a deepening of our regional footprint.
"This is an incredible time to be at APAC Realty and I look forward to working with MSPEA to further develop the business and continue to support and grow our company in Singapore and the Asia Pacific region," he adds.
Wong Chee-Yann, chief investment officer of Northstar Group, which is exiting its stake, says the team at APAC Realty has been a great partner for Northstar over the past nine years.
"We are proud to have supported the team in doubling their number of advisors, progressing their regional expansion and enhancing their tech capabilities, all through the implementation of multiple rounds of Singapore real estate market cooling measures.
The successful listing of the company on the SGX in 2017 was a significant highlight. We are confident that Morgan Stanley Private Equity will continue to provide strong support to the APAC Realty team to take the business to the next level," says Wong.
Shares in APAC Realty closed 1 cent lower, or 1.23% down, at 80.5 cents on April 25.
Photo: Albert Chua/The Edge Singapore
