Commercial & Industrial Property News Update

Singapore - ARA Receives SGX Nod For First Yuan-denominated REIT

September 18, 2012

The listing seeks to raise USD 700 million (SGD 855 million), said sources with knowledge of the matter.

A Singaporean real-estate firm partly owned by Hong Kong Tycoon Li Ka-shing has received the go ahead from the Singapore Exchange to list the country's first yuan-denominated real estate investment trust (REIT).Dynasty REIT, managed by ARA Asset Management, is said to be seeking to raise about SGD 855 million in an initial public offering (IPO) that could be launched early next month.

The IPO will be the second dual-currency listing in Singapore, after Hutchinson Port Holding Trust, which began trading in both US and Singapore currencies on April 2. Unnamed sources said that Dynasty REIT shares will also be offered in two tranches - one in Singaporean dollars and another in yuan.

The offering will test investors' appetite for yuan in Singapore, which has a pool of deposits just 10% of that in Hong Kong. Expectations for the currency's appreciation has waned in the former British colony, causing yuan deposits to come down from a high in November.

Lee King Fuei, fund manager at Schroders pls, which manages over USD 300 billion said, "They may be thinking there is a set of investors who do value exposure to another currency, which opens up the number of people who will buy their shares."

However, he noted that with the slowdown in the Chinese economy dampening demand for the currency, investor interest might be lacklustre.

Dynasty REIT is offered with an initial portfolio of three Chinese properties, one each in Shanghai, Nanjing and Dalian. The Monetary Authority of Singapore is currently reviewing the proposed IPO.

Tags: Investment properties, Commercial real estate, Income properties

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