CapitaMalls Malaysia Trust to raise US$308m through IPO

Malaysian retail investors can now own a piece of their favourite shopping malls with the planned listing of the country’s first pure play shopping mall real estate investment trust.

CapitaMalls Malaysia Trust, a unit of Singapore based CapitaMalls Asia, may raise up one billion ringgit (RM) – or US$308 million – through the initial public offering. It is one of the largest IPOs in South-east Asia this year.

CapitaMalls Malaysia Trust is offering as many as 719 million units to foreign and local institutions at about RM1.10 a unit.

Another 67.5 million units are being offered to local retail investors at RM1.08 each – with a distribution yield of 6.9 per cent, based on forecast earnings for 2011.

Speaking at the launch of the retail offering in Kuala Lumpur on Monday, CEO of CapitaMalls Asia, Lim Beng Chee, said he is bullish about the retail sector in Malaysia – with shopper traffic of over 40 million a year.

And he believes the timing is right, with rising investor appetite for Malaysian equities following an economic rebound.

Just last week, another REIT by local property group Sunway was fully subscribed.

Mr Lim said: “Sunway REIT has retail and other component as well – we are not competing with each other. In fact, the success actually gives us a lot of confidence to go into the market.”

Sharon Lim, CEO, CapitaMalls Malaysia Trust, said: “There’re a lot of opportunities for us to grow in Malaysia and bringing our expertise into Malaysia.”

CapitaMalls Asia will retain about 42 per cent in the newly listed entity. However, if an over-allotment option of up to 15 per cent of the offering was exercised, its stake would be reduced to 33 per cent.

CapitaMalls Malaysia Trust has three assets in its initial portfolio, including the Sungei Wang Plaza which is located in the heart of Kuala Lumpur.

The company sees huge potential in the Malaysian market, which is currently highly fragmented, and under supplied. It plans to acquire and develop more shopping malls after the IPO.

The trust currently has a net lettable area of more than 1.8 million square feet, including Gurney Plaza Penang and the Mines outside Kuala Lumpur.

CapitaMalls Malaysia Trust is expected to start trading on Bursa Malaysia on July 16.

The retail offering will close on July 5, while the price will be determined after the institutional tranche closes on July 7.

Source : Channel NewsAsia – 28 Jun 2010

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