Lendlease Global Commercial REIT offering meets strong demand, raises more than S$1B

An advertisement for the Lendlease Global Commercial REIT IPO at the Paya Lebar Quarter Mall, which was developed by Lendlease.An advertisement for the Lendlease Global Commercial REIT IPO at the Paya Lebar Quarter Mall, which was developed by Lendlease.

Lendlease Global Commercial REIT’s IPO of 387.47 million units at S$0.88 each has met with strong investor demand, with units set to begin trading on Wednesday at 2:00 P.M. SGT, the REIT said in a filing to SGX Tuesday.

In all, the offering had 1.17 billion units, raising gross proceeds of around S$1.03 billion, the REIT said.

“The strong support from cornerstone, institutional and retail investors underscores the strength of our high quality portfolio of stable cash flow generating commercial assets strategically located in two gateway cities with attractive retail and office markets,” Kelvin Chow, CEO of the REIT’s manager, said in the statement.

The offering of 22.73 million new units to the public in Singapore received valid applications for 330.44 million units, or around S$290.8 million, representing a subscription rate of 14.5 times, the highest for a REIT IPO in five years, the REIT said.

Indications of interest for the placement tranche offered to institutional and other investors in Singapore represented a subscription rate of 9.9 times, excluding the LLT Sub-Trust, cornerstone investors and 13 million units reserved for employees, the filing said.

Overall, the placement tranche, the public offering and the reserve units had total subscriptions valued at around S$3.35 billion, and it was 9.8 times subscribed, Lendlease Global Commercial REIT said.

The offering had 13 cornerstone investors who subscribed for a total of 453.79 million units, the REIT said.

Based on the offering price, the REIT offers a distribution yield of 5.8 percent for the forecast year 2020, running from 1 July 2019 to 30 June 2020, the filing 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 properties were appraised at a total S$1.4 billion as of end-July.

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