Sabana REIT IPO: Grp expects to buy at least three more industrial properties in SG from sponsor Freight Links to boost portfolio. REIT will raise gross proceeds of $533.4m from its listing at $1.05 per share, and offer a distribution yield of about 8.22% for FY11 and 8.25% for FY12. Sabana Reit will rank as the world's biggest syariah-compliant Reit by asset size, holding some $850m worth of 15 industrial properties in SG…
Some 508m units will be sold through the IPO, consisting of a placement of 432m units to institutional players, and a public offering of 75.5m (50m units however reserved for directors to subscribe under public offer) shares, while Freight Links will take up another 27m units, and cornerstone investors 97.8m shares. Free float appears liquid at 76.5%, with an estimated market cap of $664m…
Most of Sabana Reit's IPO proceeds, and a drawdown of $221 million from a committed three-year commodity murabaha facility, would be used to pay the vendors for the properties. Any future acquisitions, which will be aimed at SG properties, should be funded by debt, with a long-term gearing target of about 40%....
We note that Sabana currently trades at 1.05x P/B, with a low Gearing of 29%, while its average lease age is at 3.8 yrs, comparing this to its peers, (Ascedas REIT currently 1.29xP/B, yield 6.5% and gearing at 31%), (MIT currently at 1.22xP/B, yield 7.2% and gearing at 38.1%) and (Cambridge Industrial Trust currently at 0.8x P/B, yield 9.1% and gearing at 41%)..
The public offer opened yesterday and will close tomorrow. Trading should start at 2pm on Friday.
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