Parkway Reit debuts below offer price

One of the biggest initial public offerings (IPO) this year made a disappointing debut yesterday – a casualty of the uncertainties afflicting financial markets.

Despite a generally upbeat stock market, Parkway Life Real Estate Investment Trust (Reit) opened trading in the afternoon session at $1.27, a cent below the offer price of $1.28, and steadily fell before ending at $1.19 a unit.

Ms Daphne Roth, vice-president of equity research at ABN Amro Private Banking, said: “This is really wrong timing. The full risk appetite has not come back.”

The Reit was established by Parkway Holdings to invest mainly in income producing Asia-Pacific real estate especially for healthcare and healthcare-related purposes.

Parkway Holdings sold 288.9 million shares at $1.28 apiece and investors applied for about 12 times the available stock.

The strong demand had some market participants speculating that the Reit could open as high as $1.48, with generally buoyant market sentiment pushing the units as high as $1.50 apiece.

Still, UOB KayHian said that the Reit’s yield is comparable to hospitality Reits such as CDL Hospitality Trust and Ascott Reit.

“Its yield is much more attractive when compared to Reits investing in commercial, retail or industrial properties,” it said. — AGENCIEs with additional reporting by Cheow Xin Yi

Source : Today – 24 Aug 2007

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