Popular Mapletree offering reflects rapid IPO recovery

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An initial public offering in Singapore’s Mapletree Commercial Trust was nine times subscribed, officials have said, reflecting a rapid recovery in IPO sentiment since several issues were delayed by volatile markets in March.

Mapletree said on Monday that units would be priced at 88 Singapore cents each, just above the middle of the IPO’s indicative pricing range, raising S$983m ($787m) including the proceeds of an over-allotment option that increases the number of units sold if demand is high.

Executives at the company said the over-allotment option was likely to be triggered, reducing the equity remaining in the hands of Mapletree Investments, the sponsor, from 45 per cent to 40 per cent.

Shane Hagan, chief financial officer for Mapletree Commercial Trust, said “you can assume” that the additional shares would be distributed, although a final decision would not be made until the public portion of the offer, also priced at 88 cents, closed next Monday.

The IPO is the third property trust launched by Mapletree Investments, a property group owned by Temasek, the Singapore state investment agency. The earlier IPOs bundled industrial and logistics assets.

Strong demand for Mapletree follows the disclosure last week that Singapore’s Perennial Real Estate had resuscitated the planned IPO of a business trust packaging its Chinese retail properties, just five weeks after it pulled the issue. People with knowledge of the offering said the company would seek to raise up to S$840m from the IPO of Perennial China Retail Trust, compared with the S$1.1bn target understood to have been set before the issue was postponed on March 6.

The two property trusts were among a number of planned Singapore IPOs affected by turbulent markets. MMI Holdings, an engineering group, also put off a S$1bn offering.

The $5.5bn IPO of Hong Kong’s Hutchison Ports Holdings Trust went ahead but the units fell on debut, closing at 95 US cents, 5.9 per cent below the offer price of $1.01. The units closed at 93 cents on Monday. However, markets have recovered significantly in the past few weeks. The Straits Times index closed on Monday 8 points lower on the day at 3,170, compared with a nine-month low of below 2,950 struck mid-March.

The global co-ordinators for the Mapletree offering are Citigroup, Deutsche Bank, Goldman Sachs and DBS of Singapore

The Perennial offering is jointly managed by Citigroup, Goldman Sachs, Standard Chartered and DBS. There was no comment from any of the banks advising Perennial.

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