Mapletree said to raise $654 millions

Joyce Koh

Mapletree Industrial Trust, controlled by Singapore’s Temasek Holdings Pte, is set to raise S$853 million ($654 million) in an initial public offering, two people with knowledge of the matter said.

The real estate investment trust is selling 917.5 million shares at 93 Singapore cents apiece, the people said, requesting anonymity because the pricing hasn’t been publicly announced. Mapletree, owned by the real estate unit of Singapore’s state investment company, had marketed the units at 88 Singapore cents to 93 Singapore cents.

Mapletree Industrial is raising money to repay debts and buy properties in Singapore as a revival in the city-state’s economy drives rents higher. Temasek, which oversees S$186 billion, joins Government of Singapore Investment Corp. in taking assets public this month after the benchmark index rose 12 percent last quarter.

“The outlook for industrial properties is positive in Singapore,” said Anni Kum, a Singapore-based analyst at Kim Eng Securities Pte. Ltd. “Rentals are recovering, capital values have stabilized and the yield is higher than comparables.”

Mapletree Industrial’s distribution yield, a measure of return on investment, is projected to be 7.6 percent from the Oct. 21 listing date to March 31, 2011, based on the 93 Singapore cents offer price, according to the company’s IPO prospectus.

The comparable yield for Ascendas Real Estate Investment Trust, a Singapore industrial landlord, is 6.5 percent for the 12 months to ending March 2011, data compiled by Bloomberg show.

IPO revival

Industrial rents in Singapore are expected to rise “gradually” as the increase in supply will be below the 10- year average gain in demand in the next two years, real estate adviser DTZ said in a report published last month.

Mapletree Industrial’s sale adds to a recovery in IPOs in Asia outside Japan, where the value of first-time offers jumped to $37 billion in the first nine months from $20 billion a year earlier, according to Bloomberg data.

GIC, manager of more than $100 billion of Singapore’s foreign-exchange reserves, is selling shares in its overseas logistics unit in an IPO that will raise S$3.45 billion, making it Singapore’s biggest since 1993.

Mapletree Industrial, led by Chief Executive Officer Tham Kuo Wei, will have assets of about S$2.2 billion on the listing date, including 70 business parks, factories and industrial buildings located mainly in Singapore.

The company has an over-allotment option to expand the sale by 91.7 million units, and an agreement by Mapletree Investments Pte, Temasek’s real estate unit, to subscribe for 359.5 million units, according to the IPO prospectus.

Citigroup Inc., DBS Group Holdings Ltd., Goldman Sachs Group Inc. and Standard Chartered Plc are arranging the sale.

Mapletree Investments will own 37.3 percent of Mapletree Industrial after the IPO, and 31 percent if the option to expand the sale is exercised, according to the prospectus.

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