Daiwa House Logistics Trust files IPO prospectus to raise around S$576M

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Daiwa House Logistics Trust (DHLT) has filed for an initial public offering (IPO) as a REIT on SGX, with a portfolio of logistics and industrial real estate assets, in a move to raise around S$575.5 million, or around 48.66 million yen.

The trust plans to offer 244.44 million units, subject to an overallotment option for an additional 27 million units, at S$0.80 a unit, with a placement tranche and a public offering, according to a prospectus filed to the Monetary Authority of Singapore (MAS). The total number of units after the offering will be 675 million, the prospectus said.

The initial portfolio will have 14 logistics properties in Japan, with an appraised value of around 80.57 billion yen, or around S$952.9 million, the prospectus said. DHLT will pay a total purchase consideration for the IPO portfolio of 71.07 billion yen, or around S$840.5 million, according to the prospectus.

The net proceeds will be used to acquire the IPO portfolio and for general corporate and working capital purposes, the filing said.

Debt issuance

In addition, DHLT will issue 1 billion yen in bonds to Sumitomo Mitusui Trust Bank, with a maturity period of five years and an expected rate of 1.10 percent per annum, the prospectus said.

There will also be a 29 billion yen loan facility from a syndicate of lenders arranged by Sumitomo Mitsui Trust Bank, with three tranches in maturities of three, four and five years, with an expected rate of 1.10 percent a year, and a 5.6 billion yen consumption tax loan from Sumitomo Mitsui Trust Bank, with a maturity of one year and a rate of 1.37 percent per annum, the filing said.

Cornerstone investors

Around 219.44 million units will be offered to non-U.S. investors, and around 25 million will be offered to the public in Singapore, the prospectus said, adding that the public and institutional investors would hold a 36.2 percent stake.

The sponsor, Tokyo-listed Daiwa House Industry, will subscribe for 94.50 million units, or around 14 percent of the total, representing an investment of around S$75.6 million, the filing said.

One group of cornerstone investors will acquire a total 240.59 million units, or a 35.7 percent stake: Bangkok Life Assurance PCL, Credit Suisse AG’s Singapore Branch and Credit Suisse AG’s Hong Kong Branch (on behalf of certain of their private banking clients), DBS Bank, DBS Bank (on behalf of certain wealth management clients), DBS Bank (Hong Kong)(on behalf of certain wealth management clients), DWS Investments Australia, Kuang Ming Investments and Nomura Singapore (on behalf of certain wealth management clients).

Metro ARC, a wholly owned subsidiary of Metro Holdings, subscribed for 51.63 million units, or 7.6 percent of the total, and will be a substantial unitholder after the deal is completed, the prospectus said.

Hazelview Securities has subscribed for 43.85 million units, or 6.5 percent of the total, and will be a substantial unitholder once the deal is completed, the filing said.

Cornerstone investors, with the exception of the sponsor and DBS Bank in its own capacity, are not subject to lockup periods.

Positive outlook for Japan logistics

The prospectus pointed to favourable fundamentals for logistics properties in Japan, with a scarcity of high-quality modern facilities, amid a proliferation of third-party logistics and e-commerce driving demand. Much of Japan’s logistics space was developed in the 1970s and is nearing the end of its useful life and will need to be reconstructed, the filing said.

In addition, the sponsor has a growing pipeline in Southeast Asia, where there is also strong growth potential for logistics and industrial assets, the prospectus said.

DHLT will have right of first refusal (ROFR) over a pipeline of assets in Japan and Southeast Asia, the prospectus said.

“Within this asset class, the sponsor has a track record of developing over 310 logistics properties, encompassing around 10 million square meters of total GFA [gross floor area]. Furthermore, the sponsor has a healthy development pipeline of logistics facilities,” the prospectus said. ” Given that the logistics asset class is a core area of focus for the sponsor, both in Japan and across Southeast Asia, this potential pipeline of available assets is expected to remain strong moving forward.”

Profit forecasts

The REIT is forecasting net property income for the 1 October to 31 December period will be S$13.13 million, while for 2022, it forecasts S$52.65 million.

Distribution per unit (DPU) is estimated at 1.25 Singapore cents and 5.21 Singapore cents, respectively, for distribution yield of around 6.3 percent to 6.5 percent, the prospectus said.


DBS Bank is the sole financial adviser. DBS Bank and Nomura Singapore are the joint issue managers and DBS Bank, Nomura Singapore, Citigroup Global Markets Singapore and Credit Suisse (Singapore) are the joint global co-ordinators, the filing said.

DBS Bank, Nomura Singapore, Citigroup Global Markets Singapore, Credit Suisse (Singapore), Daiwa Capital Markets Singapore, Mizuho
Securities (Singapore), Morgan Stanley Asia (Singapore) and SMBC Nikko Capital Markets are the joint bookrunners and underwriters, the filing said.


Map of Daiwa House Logistics Trust's (DHLT) IPO portfolio. Credit: DHLT's prospectus

Map of Daiwa House Logistics Trust’s (DHLT) IPO portfolio. Credit: DHLT’s prospectus