Lendlease Global REIT seeks IPO on SGX to raise more than S$1 billion

Exterior of 313@Somerset, a retail property located on Singapore's Orchard Road shopping belt. It is part of the Lendlease Global Commercial REIT portfolio. Credit: Lendlease Global Commercial Trust ManagementExterior of 313@Somerset, a retail property located on Singapore's Orchard Road shopping belt. It is part of the Lendlease Global Commercial REIT portfolio. Credit: Lendlease Global Commercial Trust Management

Lendlease Global Commercial REIT is seeking an initial public offering (IPO) on SGX of 387.47 million units at S$0.88 each to raise S$1.03 billion, the REIT’s manager said in a statement Wednesday after filing a prospectus with the Monetary Authority of Singapore.

The offering, which is subject to an overallotment option, includes an international placement of 364.75 million units to institutional and other investors in Singapore and 22.72 million units to be offered to the public in Singapore, the statement said.

In addition, 13 cornerstone investors, including Fullerton Fund Management, DBS Bank, BlackRock and Lion Global, have entered into a subscription agreement to acquire 453.79 million units, the REIT’s manager said. The cornerstone investors are taking up around 38.9 percent of the total number of units, investing around S$399.3 million, the statement said.

Lendlease SREIT has also entered an agreement to subscribe for 318.14 million units, the statement said.

“We are pleased with the strong interest and support from cornerstone and institutional investors for our offering. This is a clear signal of confidence in our unique portfolio comprising high quality and resilient commercial assets across two key gateway cities,” Kelvin Chow, CEO of the REIT’s manager, said in the statement.

Based on the offering price, the REIT’s distribution yield is expected be be 5.8 percent in forecast year 2020, running from 1 July 2019 to 30 June 2020, and 6.0 percent in projection year 2021 from 1 July 2020 to 30 June 2021, Lendlease Global Commercial Trust Management, the REIT’s manager, said.

The REIT’s initial portfolio includes 313@Somerset, which is a retail property located on Singapore’s tony Orchard Road shopping belt and Sky Complex, which is three Grade-A office buildings in Milan, the filing said. The properties were appraised at a total S$1.4 billion as of end-July, the REIT’s manager said.

The three-building Sky Complex office development located in Milan. It is part of Lendlease Global Commercial REIT's portfolio. Credit: Lendlease Global Commercial Trust Management

The three-building Sky Complex office development located in Milan. It is part of Lendlease Global Commercial REIT’s portfolio. Credit: Lendlease Global Commercial Trust Management

“These properties have a balanced lease expiry profile, high occupancy and long [weighted average lease expiry], offering steady cash flow generation that will drive resilient and stable distributions for unitholders,” Chow added.

The portfolio has a high existing occupancy rate of 99.9 percent, with a well-diversified tenant base of 150 tenants across 14 trade sectors, the REIT’s manager said.

The public offering opens on 25 September and closes on 30 September, the filing said, adding trading is expected to begin on 2 October.

The REIT’s manager said funds raised will mainly be used toward paying for the initial portfolio.

Lendlease Global REIT’s sponsor, Lendlease Corp., is part of Australia-listed large global developer Lendlease Group, which has a development pipeline of nearly A$100 billion, the statement said.

DBS Bank and Citigroup Global Markets Singapore are the joint global coordinators, bookrunners and underwriters for the offering, the statement said.

In addition to Fullerton Fund Management, DBS Bank, BlackRock and Lion Global, the cornerstone investors include AEW Asia, Asdew Acquisitions, DBS Vickers Securities (Singapore) on behalf of certain corporate clients, Moon Capital Partners Master Fund, Moon Capital Performance Plus Master Fund, Nikko Asset Management, Principal Asset Management (S), Soon Lee Land, The Segantii Asia-Pacific Equity Multi-Strategy Fund and TMB Asset Management.

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