ARA eyes S$800m yuan REIT IPO

Real estate fund manager ARA Asset Management plans to raise between S$700-800 million by listing some of its Asian assets in a yuan-denominated initial public offering in Singapore, the first outside Hong Kong or China.

ARA Asset Management is an affiliate of Hong Kong tycoon Li Ka Shing’s Cheung Kong Holdings.

According to Dow Jones report, Singapore-listed ARA expects to get approval from the Singapore Exchange by next week. It hopes to complete the listing by the end of next month or early July. The company has started meeting potential cornerstone investors.

Cornerstone investors subscribe to a fixed portion of the IPO ahead of the public offering to retail and institutional investors, but in Singapore they are not necessarily committed to hold their stakes for a certain period of time, unlike in Hong Kong.

ARA’s plans for a yuan-denominated IPO comes as Singapore positions itself as an alternative destination to Hong Kong in the offshore yuan market, which has been growing as Beijing internationalises its currency.

If it goes ahead, ARA’s yuan IPO will be only the second denominated in the Chinese currency outside mainland China.

Mr Li held the only other yuan-denominated IPO outside China last year in Hong Kong – the US$1.6 billion (S$2 billion) IPO of Hui Xian REIT – which has stakes in Beijing office properties and is managed by ARA.

Getting a yuan IPO done in Singapore will be a challenge, however, given that its pool of yuan is much smaller than Hong Kong’s, which has a thriving market in yuan-denominated debt securities, dubbed dim sum bonds.

Join The Discussion

Compare listings