Sabana REIT makes weak debut

The world’s largest Shari’ah-compliant REIT by total assets opened to a sluggish start on its first day of trade in Singapore because of weak market sentiment.

Sabana Industrial Real Estate Investment Trust or Sabana REIT closed its first day of trade at S$1.02.

That’s 2.8% lower than the IPO price of S$1.05.

While it may have been a tepid debut for Sabana REIT, some analysts said they expect strong appetite for such products in the future.

Sabana REIT’s portfolio includes 15 industrial properties which are located in Singapore, where the manager of the REIT believes there is sustained demand for industrial properties.

HSBC is the sole financial adviser to the REIT, and it says this could be the first of many such listings in the market here.

HSBC’s managing director and head of real estate advisory for Asia Pacific, Jason Kern, said: “I do think it will be a bit of a trend. I think what we have demonstrated through the execution of this IPO is that there is incremental demand out there for investors who don’t normally invest in Singapore REITs.

“We have roughly 30% of the demand for this deal (from) brand new sources of capital…..the Middle East, Malaysia, Shari’ah compliant investors. So I think that’s very powerful.”

Source : Channel NewsAsia – 26 Nov 2010

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