At least five real estate investment trusts (Reits), each worth around $500 million or more, are expected to list over the next six months, according to DBS Group Holdings.
More dual listings of Reits might also be on the cards, after China firms up guidelines for the sector.
Eng Seat Moey, managing director and head of DBS Bank’s asset-backed structured products, said ‘You can expect a lot more initial public offerings (IPOs). There are a number of Singapore sponsors who wanted to launch a Reit but couldn’t do it because of the market . . . Conditions were just not right in the last two years.’
Her unit is part of the bank’s capital markets team which helps Reits with listings and secondary fundraising exercises.
She added: ‘You will also see a number of cross-border Reits which we hope to bring to the market, first quarter or first half next year.’
These Reits could have assets in China, the Middle East or Australia, but will be listed here.
Singapore’s property trust market – comprising 24 business trusts and Reits – has a market capitalisation of some US$36 billion. This makes Singapore to be Asia’s largest Reit market outside Japan.
Several other property companies have shown interest in launching Reits. For instance, Mapletree Investments said it might list Mapletree Commercial Trust early next year to raise at least $500 million.
Mapletree Commercial Trust is likely to hold VivoCity, one of Singapore’s largest shopping malls.
Ms Eng also expects Reits to carry out rights issues or unit placements to fund acquisitions. Besides raising cash, many Reits are looking to increase their free float, she said.
DBS was involved in secondary equity fundraising exercises carried out by Frasers Centrepoint Trust, CDL Hospitality Trusts and Ascott Residence Trust this year.
Ms Eng also raised the possibility of seeing more Reits dual-list – Fortune Reit obtained a dual listing in Hong Kong this year.
DBS is ‘working on a number of China deals’, Ms Eng said.
After these Reits list in Singapore and build up a track record, and when the Chinese authorities set up a Reit framework, ‘we can take them back to China’, she said.
Singapore Exchange’s potential takeover of the Australian Stock Exchange also creates an opportunity for Reits to dual list in Australia, she added, pointing out that several Reits here already own assets Down Under.
Philip Lee, JPMorgan’s chief executive and head of investment banking in South-east Asia, said that Singapore is a choice destination for listing Reits.
‘There is a very conducive regulatory framework which allows them to be listed more efficiently here. Singapore also has a following from international investors.’