Mapletree Commercial Trust debuts on Singapore Exchange

This year’s second-largest initial public offering (IPO) has a flat showing on its first trading day on Wednesday.

Mapletree Commercial Trust opened a tad higher but soon gave up early gains to end at its IPO offer price of 88 cents.

The real estate investment trust (REIT) is the most actively traded counter in the Singapore Exchange during the session, with some 140 million units changing hands.

The counter rose briefly to 89 cents, and reached a high of 90 cents but the buying sentiment fizzled out causing the stock to end its first trading day at 88 cents.

The REIT had offered about 713 million units to institutional and retail investors during its IPO.

REIT manager Mapletree Commercial Trust Management said the total placement tranche and public offer was about 8.38 times subscribed.

The offering of 712.89 million units consist of a placement tranche of 548 million units for institutional investors, and a public offering of 164.8 million units.

Cornerstone investors, including the AIA Group, Hillsboro Capital, Itochu Corporation and NTUC FairPrice Cooperative, have subscribed to a total of 302 million units.

These are separate from the offer.

Distribution per unit for the first year of the Trust’s listing (2011/2012) is 4.97 Singapore cents, and 5.42 Singapore cents in the second year (projection year 2012/2013).

The REIT owns VivoCity and office buildings such as the Bank of America Merrill Lynch HarbourFront and PSA Building.

Part of the S$893 million in IPO proceeds will be used to pay for the acquisition costs of the two office buildings.

The proceeds will also be used to fund loans, issue and debt-related costs and working capital.

The IPO follows the mega US$5.4 billion offering by Hutchison Port Holdings Trust (HPH) last month, and the S$3.45 billion offering by Global Logistics Properties late October.

The performance of these two other mega IPOs have been dismal.

At press time, HPH closed trading at 7 per cent below its offer price $1.01 and Global Logistics Properties closed two cents below its IPO price of S$1.96.

Source : Channel NewsAsia – 27 Apr 2011

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