The head office of Manulife in Toronto. Source: Wikimedia
The Manulife US real estate investment trust has priced its Singapore initial public offer (IPO) at US$0.83 each, the top of the indicative price range which translates to a projected distribution per unit (DPU) yield of 7.1 per cent for this financial year.
According to the Monetary Authority of Singapore (MAS), 396.57 million units will be offered, depending on the over-allotment option.
The offer involves an international placement of 350.78 million units to investors outside the US and a public tranche of 45.79 million units to Singaporean investors.
But due to intense interest for the international tranche, about 50 per cent of the units from the retail tranche will be pulled back, marker analysts say. Therefore, the final international tranche will be 378.93 million units, including over-allotment units, while the final retail tranche are estimated to be 45.79 million units.
The Canadian financial services group failed in an initial attempt in July 2015 but this time achieved much more traction with an increased deal, thanks to the higher yield on offer and less volatile markets.
One IPO in Singapore last year led equity bankers to hope Manulife US Reit would prompt other international property trusts to follow. Germany’s IReit Global, Japan’s Croesus Retail Trust and Accordia Golf Trust settled on Singapore in 2013 and 2014. Last year was disappointing, however, for the S-Reit sector as fears about a US interest rate hike increased.
Interest apparently came from a wide variety of funds and family offices. The real estate investment trust has secured six principal investors, including the sovereign wealth fund Oman Investment Fund and Malaysia’s asset management company Fortress Capital Asset Management.
The cornerstone investors entered into a separate subscription deal to subscribe for 169.544 million units.
This is the second time that the company has tapped the Singapore IPO market, after failing to launch last year because of unfavourable market conditions.
Credit Suisse AG, DBS Bank and Deutsche Bank are among the banks advising Manulife US on the offer.
The IPO is due to close on May 18 with trading anticipated to start on May 20.