YTL launches Starhill REIT
YTL just announced earlier this week that they are listing the Starhill REIT (real estate investment trust) to raise about RM523.39 million from the initial public offering (IPO). This is the largest property trust to be listed in Malaysia so far.
This news was widely reported in leading newspapers (here and here too) and was also published in YTL’s community webpage. Among the highlights of the announcement was:
- The REIT would use 80% of its proceeds to buy more assets in Malaysia, Europe and US;
- This is the second REIT to be listed locally after the Axis REIT that raised about RM123 million in its IPO in August;
- Two properties under the YTL group will form part of the REIT are Starhill and Lot 10, which have have occupancy rates of 99% and 96%, respectively as of October. Another property included is the JW Marriot hotel, totaling to RM1.15billion. The REIT will pay all of its earnings as dividend in the first two years and 95% of earnings in subsequent years.
- YTL are planning to offer 509.6million new units (about 49%) of its total units, beginning this Dec 16. Out of this, about 29.99 million units will be offered to retail investors at 98 sen apiece, with the balance of 479.6 million will be offered to institutional investors via a
bookbuilding exercise. - They are estimating an indicative price of RM1.03 per unit, with a dividend yield of 6.1%. It would have a yield of 6.4 per cent based on a retail IPO price of 98 sen. YTL are predicting a distributable income of RM32.3 million for the six months to June 30 2006, on the back of RM47.4 million in net revenue.
- ECM Libra Securities Sdn Bhd, DBS Bank Ltd and the Hong Kong and Shanghai Banking Ltd are the joint book-runners for this offering with AmMerchant Bhd Group as the senior co-lead manager. ECM Libra is also the lead financial adviser for this IPO.
- Comparatively, the Axis REIT was oversubscribed when it closed its initial public offering in August. Institutional investors asked for about 18 times more than what was on offer, while the retail portion of 15 million units was also oversubscribed by 3.72 times.
- In the coming months, other new issues of REITs expected are fund manager Permodalan
Nasional Bhd and hospital operators Pantai Holdings Bhd and KPJ Healthcare Bhd.
For further reading, check out our earlier postings regarding REITs in Property Malaysia:
Budget Boost for Malaysian REITs
Budget 2006: Effects on Housing & Property Sector
About Malaysian REITs
YTL to Launch Starhill REIT in October
How Secure Are REITs?
