HNA Commercial REIT is expected to have an estimated issue size of S$775 million ($561.2 million) in its upcoming initial public offering (IPO) on the Singapore bourse. This is expected to be the largest IPO on the Singapore bourse this year.
According to media reports, indicative market capitalisation is estimated in the range of S$780 million to S$800 million. The total offering size was initially estimated from S$430 million to S$450 million. Sponsors of the REIT will grant it the right of first refusal to two properties in UK.
Shenzhen-listed HNA Investment Group is expected to emerge as the largest shareholder, with an equity interest of at least 35 per cent and a 75 per cent stake in the REIT manager, HNA-A EP REIT Management. The REIT manager was established in partnership with Singapore-based property fund management firm AEP Investment Management.
HNA Group is the parent of HNA Holding Group Co, which is currently discussing the acquisition of a controlling stake in CWT from C&P Holdings.
The investment mandate for the real estate investment trust (REIT) is to invest in commercial and business parks in Australia, Singapore and the UK, with a gearing expected to be 28.6 per cent. This gives it the potential to acquire more properties.
According to The Edge Singapore, which cites documents it reviewed, the IPO portfolio will comprise five properties, covering 46 per cent of the portfolio in Australia, 27 per cent in the UK, and 26 per cent in Singapore.
Two of the properties are StarHub Green in Ubi and 41 George Street in Brisbane. The Singapore property has a 94.7 per cent occupancy while the Brisbane property has occupancy of 99.8 per cent. Both assets are from the Basil Property Trust, which is managed by AEP.
Another property in the portfolio is an asset in the UK, Trident Place Business Park, Hatfield, which is 100 per cent occupied. This is from AEP’s UK Separate Account Fund.
The two remaining properties are office buildings in Sydney and Adelaide. Two of these IPO assets hold AEI (asset enhancement initiative) potential.