Temasek-backed China REIT Surges After Record Singapore IPO

Hong Kong, China
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Mapletree Greater China Commercial Trust rose as much as 10.2 percent in its debut on Thursday, underscoring demand from yield-hungry investors after the Temasek-backed trust raised $1.3 billion in Singapore's biggest REIT offering.

The real estate investment trust, which is backed by Singapore state investor Temasek Holdings Pvt Ltd, rose to S$1.025 in early trading, compared with a 0.1 percent decline in the benchmark Straits Times Index.

The REIT consists of office and retail developments in mainland China and in Festival Walk, an up-market shopping center in Hong Kong's Kowloon district.

The trust priced the IPO at S$0.93 per unit, at the top of its marketing range. At that price, the REIT would yield 5.6 percent for the financial year ending in March 2014 and 6.1 percent for the following year.

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The projected returns compare with an average of 5.05 percent on retail REITs and 4.82 percent for office REITs listed in Singapore for the 12 months through the end of January, according to Asia Pacific Real Estate Association (APREA) data. In Hong Kong, retail REITs posted an average yield of 4.6 percent, while office REITs had 5.46 percent in the same period.

Temasek will remain the largest shareholder of the REIT after the IPO, through its indirect holding of Mapletree Investments Pte Ltd, the sponsor of the trust. Mapletree Investments, which will hold 35 percent of the REIT after the listing, is wholly owned by Temasek's Fullerton Management Pte Ltd.

Citigroup, DBS, Goldman Sachs and HSBC were hired to manage the IPO.