ARA

ARA: secures role in Li Ka-Shing’s RMB Reit.
Li Ka-Shing-affiliated Hui Xian Reit has launched its public offering of 2b new units at an offer price of between RMB5.24 - 5.58 / unit. The market cap on listing is c.RMB26.2 - 27.9b (S$5 -5.4b). Annualized forecast distribution yield is btwn 4 - 4.26%. Hui Xian REIT will be the first offshore RMB-denominated Reit to be listed in HK...

It will own Oriental Plaza in Beijing, an integrated development consisting of retail malls, offices, serviced apartments and a hotel. The asset was developed by a consortium led by Cheung Kong Holdings. The IPO is expected to close on 19 Apr, with trading expected to commence on 29 Apr..

The REIT will be managed by Hui Xian Asset Management, a 30% associated company of ARA. The other shareholders of the manager are Cheung Kong (30%) and CITIC Securities (40%). ARA’s limited role in the Reit was expected but should nevertheless give a boost to its earnings this year. ARA expects the Hui Xian listing to add S 0.25ct to FY11 EPS on a pro-forma basis...

ARA had earlier said it plans to list another 1-2 Riets in the next 12-18 months, potentially including a Shariah-compliant REIT, that are of at least S$1b in size each. FY11 net profit could match or exceed FY10 levels with the closing of Asia Dragon Fund-II and the potential listing of 2-3 Riets.
The Street has Buy/ Outperform ratings with TP ranging btwn $1.74- 1.98.