Lotte Shopping has postponed the listing of an up to US$1 billion (S$1.25 billion) real estate investment trust (REIT) in Singapore, underscoring lacklustre appetite for initial public offerings amid volatile market conditions.
The operator of South Korea’s largest department store chain said in a regulatory filing yesterday it might reconsider the option if global financial markets improve, but is currently looking at a sale and leaseback deal through a local public real estate fund as an alternative.
Singapore’s IPO market has struggled in recent years as most big-ticket listings in Asia opt for Hong Kong, where there is more robust demand from Chinese and international investors.
IPO deals in Singapore so far this year have had a slow start, raising only US$774.6 million (S$969.2 million) compared with US$2.46 billion (S$3.08 billion) for the same period last year.
Volatile equity markets also scuppered one other big Asian IPO this week — a Hong Kong listing for Chinese pork producer WH Group, even after it cut the offer size by two-thirds to US$1.9 billion. WH Group’s IPO had also suffered from rich valuations and negative publicity over executive compensation.
The marketing for the Lotte IPO had been delayed as concerns about economic growth in China and other emerging markets triggered a sell-off in riskier assets, reducing investor appetite for these markets.
Lotte had been pursuing the listing to improve its financial structure and utilise funds for its business operations in South Korea and abroad.
Source : Today – 3 May 2014