Will Japan quake delay listing of world’s largest Syariah-compliant REIT?

The listing of Malaysia’s Axis Global Industrial real estate investment trust (REIT), the world’s largest Syariah-compliant REIT, has been pushed back by about a month after two of its Japanese assets were damaged by the March 11 earthquake, according to a source.

The source said that the two properties in Iwanuma, which is near Sendai, the worst-hit area in Japan, have been removed from the initial asset composition, which means the size of the REIT has been reduced.

“The two properties were small contributors to the portfolio and should not affect the IPO by that much,” the source with direct knowledge of the matter told Reuters.

Listing documents obtained by Reuters valued the two properties at ¥1.8 billion (S$27 million) of an initial asset size of about RM3.17 billion (S$1.3 billion), making it the largest REIT compliant with Islamic or Syariah laws. The REIT comprises properties in Australia, Hong Kong and Japan.

Australia’s Goodman Group, which sold the properties to the REIT, will continue to be property managers directly or through their associated companies such as J-REP in Japan and GPS Hong Kong Whole Sale.

The IPO was initially slated to raise RM2.15 billion to partially pay for the asset acquisitions, while the remainder would have been financed by debt. The source said that a new listing prospectus reflecting the change in the asset composition had to be resubmitted to the Malaysian Securities Commission for approval.

Based on the initial timeline, Axis Global was supposed to list in early June, but could now see the process pushed back to the end of the month or early July, said the source, who was not authorised to speak to media.

Axis Global will also be the largest free-float REIT in Malaysia with 98 per cent of the units to be offered during the IPO.

The REIT managers, Axis REIT Managers, which presently run Malaysian-listed Axis Real Estate Investment Trust, declined to comment on the development.

“No comment (on the Japanese properties) but everything is on track,” said Mr Stephen Hawkins, a part-owner of Axis REIT Managers and chief executive of Axis Global.

Source : Today – 22 Apr 2011

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