Far East Reit (IPO)

Upcoming IPO: Far East Reit, which owns hotels and serviced residences in Singapore, started pre-marketing on Friday an IPO of up to $700m, the biggest in the country so far this year, according to newswires. The REIT, sponsored by Far East Organization, comprises 7 hotels and 4 serviced residences in Spore with ~ 2,500 rooms. The deal will come on the heels of Ascendas Hospitality Trust's US$304 m offering, which had to be relaunched this week after the co was forced to remove one of the hotels from its portfolio. It will be a welcome development for equity capital markets in Singapore, where issuance plunged 74% yoy to US$4.7b in 1H12. The slump was much steeper than the 30% decline in stock sales in Asia ex-Japan. Far East Reit and its bankers will start taking orders for the IPO on Aug 6, with pricing slated for Aug 15. The Reit is set to debut on SGX on Aug 27. The Reit is being marketed at a yield of 6 - 6.5%. About half of the orders for the offering are expected to be covered by cornerstone investors. DBS, Goldman Sachs and HSBC were hired as joint global coordinators and joint bookrunners on the deal.