News
Overwhelming Demand For A-REIT IPO-Five Times Subscribed-Issue Price At S$0.88 Per Unit
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INITIAL PUBLIC OFFERING FOR ASCENDAS REAL ESTATE INVESTMENT TRUST ("A-REIT"), SINGAPORE'S FIRST BUSINESS AND INDUSTRIAL PROPERTY TRUST |
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Singapore, 05 November 2002 - Sponsors Ascendas Land (Singapore) Pte Ltd ("Ascendas") and Australian based Macquarie Goodman Industrial Management Pty Limited ("MGIM") (the "Sponsors") today announced the launch of the initial public offering for the Ascendas Real Estate Investment Trust ("A-REIT") ("IPO"), Singapore's first listed business and industrial property trust. The offering to domestic and international investors will comprise 272,500,000 units of A-REIT (the "Units") (before exercise of the over-allotment option) at an issue price of between S$0.83 and S$0.88 per Unit (the "Offering Price"), representing 50% of the total A-REIT issue of 545,000,000 Units. The balance of units will be issued to cornerstone investors (15%) and the Sponsors (35%). The IPO will be opened to local retail and institutional investors as well as international institutional investors on 5 November 2002 at 12.00 noon. The offer will close on 13 November 2002 at 8.00 a.m. Trading of the Units on the Singapore Exchange ("SGX") on a "ready" basis is expected to commence at 2.00 p.m. on 19 November 2002, subject to the SGX-ST being satisfied that all conditions necessary for the commencement of trading in the Units on a "ready" basis have been fulfilled. Based on the offering price range of minimum S$0.83 per Unit and maximum S$0.88 per Unit, the expected yields are shown in Table 1. A-REIT will distribute 100% of its taxable income on a semi-annual basis to the unitholders with the amount calculated as at 30 September and 31 March each year. The first distribution, however, will be for the period from the date of issue of the Units to 31 March 2003 and will be paid by Ascendas-MGM Funds Management Limited (the "Manager") on behalf of A-REIT on or before 31 May 2003. 5 Months Ending 31 March 2003 12 Months Ending The Manager, jointly owned by Ascendas Investment Pte Ltd, a related company of Ascendas, (60%) and MGIM (40%), will manage A-REIT's portfolio of eight properties. These comprise four buildings at the Singapore Science Park - The Alpha, The Aries, The Capricorn, and The Gemini; three hi-tech/light industrial buildings - Techlink at Kaki Bukit and Techplace I and II at Ang Mo Kio; and the built-to-suit Honeywell Building at Changi Business Park. These properties cater to tenants across industries including research and development, life sciences, IT, engineering and light manufacturing. DBS Bank, JPMorgan and Salomon Smith Barney are fully underwriting the IPO at the Offering Price. JPMorgan and Salomon Smith Barney are the joint financial advisers for the A-REIT IPO while DBS Bank, JPMorgan and Salomon Smith Barney are joint global coordinators, bookrunners and underwriters. DBS Bank, JPMorgan and Salomon Smith Barney have been granted an over-allotment option by the Sponsors exercisable in full or in part within 30 days after the Listing Date. This enables them to purchase from the Sponsors up to an aggregate of 40,875,000 Units at the Offering Price, solely to cover the over-allotment of Units. In addition, cornerstone investors have been secured for 80 million Units (approximately 15%) in A-REIT. These investors include BT Funds Management Limited, Lianhe Investments Pte. Ltd., NTUC Income Insurance Co-operative Ltd and Super Vista Sdn. Bhd (a subsidiary of Hotel Properties Limited). They have each entered into a subscription agreement with the Manager subject to completion of the proposed IPO. The remaining 192,500,000 Units (35%) will be subscribed by Ascendas (140,075,000 Units) and MGIM (52,425,000 Units), the Sponsors of A-REIT. On listing, A-REIT will have total assets of S$617.3 million and net asset value per Unit of S$0.89. A-REIT was declared an authorised unit trust scheme on 9 October 2002, qualifying as an investment permitted to be made by trustees and certain other persons with similar investment powers in Singapore. Investors in Singapore may also use up to 35% of the Investible Savings in their CPF Ordinary Account to subscribe for Units in A-REIT as an investment. According to the A-REIT prospectus, investors in A-REIT will be able to enjoy yields forecast at 8% or more*, based on conservative rental and occupancy assumptions. A-REIT's properties have secured 93.7% of committed leases as at 31 March 2003 and 67.2% of secured leases for the year ending 31 March 2004. These are supported by an average occupancy rate of 84.6% and an average tenant lease renewal rate of approximately 80.0% for the three months ended 30 June 2002. A-REIT is able to offer stable income streams as its diversified property portfolio reduces its reliance on any particular tenant or industry sector. No single tenant accounted for more than 6% of total net lettable area as at 30 June 2002. The properties will also be acquired at a discount to the appraised value of S$607.2 million. The discount will be 9.9% based on the minimum subscription price of $0.83 per Unit of the offering price range and 5.6% based on the maximum subscription price of S$0.88 per Unit. To reflect its strong commitment to meet the forecast set out in the A-REIT prospectus, the Manager's fee structure is part performance-based. Management fees will be waived up to 100% to support the forecast and projected distributions for the period ending 31 March 2003 and the year ending 31 March 2004. The Manager will also look to increase the net asset value per Unit of A-REIT through growth opportunities in the current portfolio as well as through acquisition of new properties. Mr Goh Kok Huat, Chief Executive Officer of the Manager, said, "As the Manager, we are committed to delivering attractive yields, stable income and long-term capital growth potential to investors. To underscore the confidence that the Manager has for the projections, we have agreed to waive such proportion of the management fees as would be required to support the forecast and projected distributions during the forecast and projection periods ending 31 March 2003 and the year ending 31 March 2004, respectively." He added, "There is growth potential from planned enhancement of several existing assets, leasing of recently-completed space and the purchase of properties that meet our investment criteria. It is also a plus factor that Ascendas has granted us a five-year right of first refusal to acquire from its portfolio of investment-grade properties." According to Ms Chong Siak Ching, President and Chief Executive Officer of Ascendas Pte Ltd, "A-REIT is one of Ascendas' initiatives to re-deploy capital for its growth as Asia's leading provider of business space as well as to develop a real estate funds management business. Together with our partner, Macquarie Goodman, we are committed to the success of A-REIT with our sizeable combined stake of up to 35.3% in A-REIT." Mr Gregory Goodman, Chief Executive Officer of Macquarie Goodman Management Limited, said, "Macquarie Goodman is delighted to team up with Ascendas to launch A-REIT. We have a long-term commitment to Singapore and the success of A-REIT. Our strong track record in managing Australia's largest industrial listed property trust should benefit A-REIT." He concluded, "The listed property market has been a popular investment choice among Australian investors due, mainly, to the delivery of steady returns and relatively high distribution streams. We expect the Singapore REIT market to develop in a similar manner and are proud to be in the forefront of that development with the launch of A-REIT." - End - |
| About Ascendas-MGM Funds Management Limited |
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A-REIT has a diversified portfolio of eight properties comprising business park (including science park), light industrial and built-to-suit properties in Singapore, valued at approximately S$607.2 million (as at 1 August 2002). These properties house a tenant base of more than 300 international and local companies operating in a range of industries and activities, including research and development, life sciences, information technology, engineering and light manufacturing. Tenants include Bioprocessing Technology Centre, Federal Express, Honeywell, Institute of Microelectronics, Lilly Systems Biology, Teradyne and Venture Corporation, just to name a few. The rental income from the tenants contributes to the stable distributions to be delivered by A-REIT. A-REIT is managed by Ascendas-MGM Funds Management Limited, a joint venture between Singapore-based Ascendas Investment Pte Ltd, a related company of Ascendas Land (Singapore) Pte Ltd, and Australian-based Macquarie Goodman Industrial Management Pty Limited. |
| About Ascendas |
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Ascendas has a well-established track record as a provider of total business space solutions. These solutions include the development, management and marketing of science parks, business, high-tech and industrial parks. It also bundles e-infrastructure as part of its value-added services in key markets in Asia, such as Singapore, China, India and the Philippines. Ascendas is backed by a strong team of 300 professionals across its key markets. It has a total of S$1.8 billion (based on market value as at 30 June 02) in assets and business environments spread over 1.2 million square metres. Its international clientele of some 1,000 customers include Fortune 500 corporations, multinational corporations, leading local enterprises and research organisations. Ascendas has 8 offices in the region including Singapore, China, India, the Philippines and Japan. |
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About Macquarie Goodman Management Limited |
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Macquarie Goodman Industrial Management Pty Limited is a wholly owned subsidiary of Macquarie Goodman Management Limited ("MGM"), Australia's leading industrial funds management and property services company. MGM is listed on the Australian Stock Exchange with a market capitalisation of approximately A$340 million (as at 31 October 2002). It is the fund and property manager of Australia's largest listed industrial property trust, Macquarie Goodman Industrial Trust, which owns a property portfolio of 58 properties valued at approximately A$1.8 billion, with 13,000 investors (as at 31 October 2002). MGM's major shareholder, Macquarie Bank Limited, has funds under management of over A$40 billion in Australia. |
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+A-REIT has received a Letter of Eligibility from the SGX-ST for the listing and quotation of Units on the Main Board of the SGX-ST. A-REIT's eligibility to list on the Main Board of the SGX-ST does not indicate the merits of the Offering, A-REIT, the Manager or the Units. The SGX-ST assumes no responsibility for the correctness of any statements or opinions made or reports made in documents issued by A-REIT or in relation to the IPO. The Prospectus may be obtained upon request, subject to availability, from DBS Bank, JPMorgan or Salomon Smith Barney. Investors should read the Prospectus before deciding whether to subscribe for or purchase Units in A-REIT. The value of the Units in A-REIT and the income accruing to the Units may fall or rise. Investors in A-REIT will have no right to request the Manager to redeem their Units while the Units are listed. It is intended that unitholders may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST will not guarantee a liquid market for the Units. |
| * All forecasts and return projections will be based on an issue price per Unit of A-REIT at its initial public offering ("IPO") of between S$0.83 and S$0.88 per Unit (the actual IPO issue price to be determined before the listing date) and on the Manager's assumptions as explained in the Prospectus. Yields mentioned will vary accordingly for investors who purchase Units in the secondary market at a market price higher or lower than the IPO issue price. The major assumptions used by the Manager are certain expected levels of property rental income and property expenses over the relevant periods, which are considered by the Manager to be appropriate and reasonable as at the date of the Prospectus. The forecast and projected financial performance of A-REIT is not guaranteed and there is no certainty that any of it can be achieved. Investors should read the prospectus for details of the forecasts and projections and consider the assumptions used and make their own assessment of the future performance of A-REIT. |
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Visit the A-REIT website at www.a-reit.com.sg for more details. Media Contact Singapore Ho Mei Peng Australia |