Petaling Jaya – Sunway City Berhad and Sunway REIT Management Sdn Bhd today announced the launch of the initial public offering of 1,655 million units in Sunway Real Estate Investment Trust (Sunway REIT) in conjunction with the listing of 2,680 million units on the Main Market of Bursa Malaysia. Upon Listing, the Sunway REIT is expected to become Malaysia’s largest listed Real Estate Investment Trust by appraised property value, at the approved valuation of RM 3,729 million with an approved fund size of 2,780 million units. Sunway REIT Management Sdn Bhd, a wholly owned subsiadiary of Sunway City Berhad was appointed the manager for the Sunway REIT, as appointed on May 20.
The launch of the offering was officiated by YB Tan Sri Nor Mohamed Yakcop, Minister in The Prime Minister’s Department, Economic Planning Unit, together with Tan Sri Dato’ Seri Dr Jeffrey Cheah, AO, Chairman of Sunway City Berhad and Dato’ Jeffrey Ng, CEO, Sunway REIT Management Sdn Bhd. in the presence of invited guests.
The prospectus relates to the initial public offering of 1,654,969,300 new units (Offer Units) representing undivided interests in Sunway REIT (subject to the over-allotment option and the clawback and reallocation provisions). The initial public offering of the Offer Units comprise a retail offer and an institutional offer. While a total of 134,005,600 units (approximately 8% of the Offer Units) will be offered to the Malaysian public under the retail offer, the remaining 1,520,963,700 units (approximately 92% of the Offer Units) will be offered to Malaysian and foreign investors under the institutional offer.
The retail offering to domestic retail investors will be made available for application at the initial retail price of RM0.97 per Offer Unit. The final retail price per Offer Unit (rounded up to the nearest sen) will be the lower of RM0.97 or 97% of the institutional offer price, to be determined by the way of bookbuilding.
Additionally, four cornerstone investors have been secured for 376 million units, approximately 22.7% of the Offer Units. These cornerstone investors are Government of Singapore Investment Corporation (GIC), the Employees Provident Fund Board (EPF), Permodalan Nasional Berhad (PNB), and Great Eastern Life Assurance (Malaysia) Berhad.
Sunway REIT comprises a portfolio of eight of Sunway City Berhad’s prime properties situated in Penang, Perak, Selangor and Kuala Lumpur. They include retail properties – Sunway Pyramid Shopping Mall, Sunway Carnival Shopping Mall, and SunCity Ipoh Hypermarket; hospitality properties – Sunway Resort Hotel & Spa, Pyramid Tower Hotel, and Sunway Hotel Seberang Jaya; and office properties – Menara Sunway and Sunway Tower. Combined, the properties consists of approximately 5,453,453 sq. ft., 1,582,185 sq. ft. and 1,111,387 sq. ft. of retail, hospitality and office gross floor area, respectively, making up the total asset valued at RM3,729 million.
The investment objectives of the Sunway REIT is to provide the unitholders with an exposure to a diversified portfolio of authorised investments with the potential for sustainable growth of the net asset value per unit. Its diversified property portfolio aims to reduce risks associated with reliance on any particular tenant or industry sector.
Sunway REIT’s principal investment policy is to invest in the retail, hospitality and office sectors. For active asset management, its strategy is to leverage on the property portfolio’s competitive strengths to optimise rental, occupancy and net lettable area to increase rental income. Its acquisition growth strategy is to identify and selectively acquire income producing properties that meet the Manager’s investment criteria. Its capital and risk management strategy is to optimize the capital structure and cost of capital of Sunway REIT and to adopt an active interest rate management strategy to manage the risks associated with changes in interest rates.
The retail offer of the IPO is open for application by retail investors starting 15 June 2010 at 10.00 am. The offer will close on 22 June 2010 or such later dates as the Directors of the Manager so decide.
Sunway REIT was established by a deed entered into on 20 May 2010 between Sunway REIT Management Sdn Bhd and OSK Trustee Berhad, as manager and trustee respectively.
RHB Investment Bank, CIMB Investment Bank and Maybank Investment Bank are joint underwriters for the retail offering, while RHB Investment Bank Berhad is the sole financial advisor for the Sunway REIT IPO. Joint global coordinators for the institutional offering are RHB Investment Bank and Credit Suisse. Joint bookrunners for the institutional offering are RHB Investment, Credit Suisse, CIMB Investment Bank, HSBC, JP Morgan and Maybank Investment Bank.
Dato’ Jeffrey Ng Tiong Lip, Chief Executive Officer of the Manager, said, “As the manager, we are committed to actively providing value-added services to the properties.” He added, “There is a planned enhancement of several existing assets, and leasing of recently-completed space. The assets being injected into the REIT are assets in locations which have proven track records for growth. Four of the assets are in Bandar Sunway itself which has over the years, proven its growth potential as a landmark tourist destination.”
According to Tan Sri Dato’ Dr Jeffrey Cheah, AO, Chairman of Sunway City Berhad, the Sunway REIT will support the redeployment of capital for Sunway City Berhad’s continuous growth as a regional master community builder.
He stated, “With the launch of this REIT, we are inviting investors to take ownership of Sunway’s remarkable story. The team managing the Sunway REIT consists of valuable talents who have contributed to Sunway City Berhad’s outstanding performance. Their track records are underscored by consistent performance to create, generate and add value, withstanding fluctuations in the business cycles. I strongly believe that they will display the necessary aggressiveness, backed by experience and specialised opportunistic and structuring skills to propel the Sunway REIT to new heights with a wider portfolio of properties and investment base.”