Real estate fund manager ARA Asset Management is exploring the possibility of a yuan-denominated initial public offering of some of its Asian assets in Singapore this year in what would be the first IPO in the city-state in the Chinese currency, people familiar with the situation said yesterday.
Singapore-listed ARA, an affiliate of Hong Kong tycoon Li Ka-shing’s Cheung Kong Holdings, is looking into the real estate investment trust listing of assets in its Dragon Fund II, which has a portfolio of property assets across Asia, the sources said. One of the sources said ARA had yet to finalise the assets to be included in the IPO. ARA officials were not available for a comment.
The plan to do a yuan-denominated IPO here comes as Singapore positions itself as an alternative destination to Hong Kong in the growing offshore market for the Chinese currency. If it goes ahead, ARA’s planned yuan IPO will only be the second denominated in the Chinese currency outside mainland China.
Mr Li, one of the richest men in Asia, last year launched the only yuan-denominated IPO outside China – the US$1.6 billion (S$2.02 billion) IPO in Hong Kong of Hui Xian REIT, which has stakes in Beijing office properties and is also 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.
Singapore property developer Ascendas Group had plans to list its Chinese property assets through a yuan REIT IPO in the second half of last year but that fell through due to adverse market conditions, people familiar with the situation said. Ascendas has not revived those listing plans since.
ARA manages real estate-focused private funds, as well as REITs listed in Singapore, Hong Kong and Malaysia with diversified portfolios in retail, office, industrial and logistics segments. Apart from the Dragon fund and Hui Xian REIT, ARA manages Singapore-listed Suntec REIT as well as Hong Kong-and Singapore-listed Fortune REIT.
Source : Today – 21 Mar 2012