SPH in possible ‘S$1b REIT IPO’

Singapore Press Holdings (SPH), the newspaper publisher that owns Paragon shopping mall on Orchard Road, has tapped Credit Suisse and DBS Group to manage a listing of its property assets in an initial public offering (IPO) of as much as S$1 billion, according to people with knowledge of the matter.

The IPO could take place as soon as the third quarter of this year, said two sources, who asked not to be identified as the information was private.

SPH said last month it was considering listing the assets in a real estate investment trust, or REIT.

CIMB-GK analyst Kenneth Ng, said the IPO could raise as much as S$1 billion, making it Singapore’s second largest this year, after Mapletree Greater China Commercial Trust raised S$1.6 billion in February, according to Bloomberg data.

REITs have been the biggest fundraisers in Singapore’s IPO market in the past 12 months, accounting for S$2.4 billion of the S$4.3 billion raised during the period, the data showed.

“Fund-raising from the REIT allows them to find resources to fund their future acquisitions, possibly in suburban town centres in Singapore,” Mr Ng said.

“Property and investment returns have been a big part of their earnings, because their media business isn’t growing much,” he added.

Spokespeople at SPH, Credit Suisse and DBS declined to comment on the banks’ role in a possible IPO.

SPH’s key real estate assets, including Paragon and Clementi Mall are “fully leased”, SPH said earlier this year. A new property, Seletar Mall, is expected to be completed at the end of next year, it added.

With Paragon — which houses retail brands including Burberry and Prada— accounting for about 80 per cent of the REIT’s property portfolio, Mr Ng estimates that its market capitalisation could be close to S$3 billion, making it one of the top three retail REITs in Singapore.

Source : Today – 10 Apr 2013

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