Daiwa House Logistics Trust: IPO demand ‘overwhelming’

Japanese 1,000 yen notesJapanese 1,000 yen notes

Daiwa House Logistics Trust (DHLT) said Thursday its initial public offering (IPO) has been met with ‘overwhelming demand,’ with the Singapore public offer 9.5 times oversubscribed and the placement tranche 4.9 times oversubscribed.

The trust’s units are set to begin trade on Friday at 2:00 p.m. SGT; the IPO was priced at S$0.80 a unit.

Daiwa House Logistics Trust’s international placement of 219.44 million units attracted strong interest from a mix of long-only institutional investors, insurance firms, multi-strategy funds, family offices and high net worth individuals, the trust said in a filing to SGX.

Takeshi Fujita, CEO of the trust’s manager, Daiwa House Asset Management Asia, pointed to strong support from cornerstone, institutional and retail investors.

“We believe that this is testament to the attractiveness of our portfolio of high-quality modern logistics properties, as well as the strength of our sponsor – Daiwa House Industry Co., Ltd., one of the largest construction and real estate development companies in Japan,” Fujita said in the statement.

Fujita noted the trust’s sponsor plans to aggressively pursue logistics development projects, particularly in the Southeast Asian region, citing demand for overseas logistics and manufacturing bases, particularly by Japan-based tenants.

“The sponsor has granted a right of first refusal to DHLT over the sponsor’s pipeline of assets in Southeast Asia and Japan,” he 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.

Cornerstone investors

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 IPO 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 IPO prospectus said.

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.