Kuala Lumpur,07 February 2020
- Elite Commercial RE’s listing in Singapore provides Sunway another avenue to diversify its geographical footprint
The Sunway RE Capital-sponsored Elite Commercial REIT started trading on the Singapore Exchange’s Mainboard yesterday at £0.705, and an intra-day high of £0.715. This translated to approximately 3.7% and 5.1% higher than the initial public offering (IPO) price of £0.68 per unit. It closed at £0.71 per unit, approximately 4.4 % higher than the IPO price.
Sunway RE Capital Executive Director, Dr Tan Kok Heng said, “Sunway RE Capital is Sunway Berhad’s private real estate division formed in 2018 with the objective of building up a stable and sustainable income stream via real estate fund management. The Elite IPO is part of Sunway’s longer term plan to grow real estate portfolio investments in selected international markets.”
Sunway RE Capital owns 8.9% of the Elite REIT after the IPO. Sunway RE Capital is a wholly-owned subsidiary of Sunway Berhad.
The other sponsors are Elite Partners Holdings Pte. Ltd. and Ho Lee Group Pte. Ltd.
Sunway RE Capital has a 15% stake in the REIT Manager, Elite Commercial REIT Management Pte Ltd. The remaining 85% is held by Elite Partners Holdings (in which Singapore’s former Viva Industrial Trust founder Victor Song and construction and property firm Ho Lee Group have a stake). At IPO, the sponsors collectively own about 20% of the REIT vehicle.
Sunway RE Capital is also investing in other asset classes internationally. In October 2019, Sunway RE Capital set up a private trust known as the Sunway Residence Trust to selectively invest into purpose-built student accommodations in the United Kingdom. The Trust has so far acquired three student accommodations in Sheffield and Bristol, UK.
Elite Commercial REIT is the first British Pound-denominated REIT in Singapore and is the first Mainboard listing on the Singapore exchange for the year.
Elite Commercial REIT has about £320 million assets under management currently and seeks to grow its portfolio over time through the potential development of undeveloped land in its portfolio, including a possible doubling in size of its Peel Park asset in Blackpool.
On 28 January, Elite Commercial REIT launched its IPO, pricing its units at £0.68 or S$1.21 per unit, which will translate to a forecast distribution yield of 7.1% for 2020 and 7.2% for 2022. Distributions will be declared in British pounds, and unit holders will receive their distributions in Singapore dollars equivalent of the amount declared in pounds with the option to receive the entire distribution in pounds.
On 4 February, Elite Commercial REIT’s announced that the IPO was oversubscribed at 8.3 times with applications for about 47.85 million units received for the roughly 5.73 million units offered to the public in Singapore. The retail tranche constituted 5% of the overall offering while its placement tranche was 3.2 times subscribed by institutional investors and high-net worth individuals. The UK-focused REIT issued a total of 192.5 million units to raise gross proceeds of £130.9 million.