IREIT Global

http://www.businesstimes.com.sg/premium/...g-20140717

PUBLISHED JULY 17, 2014
Office Reit eyes mainboard listing
BYJOYCE HOOI
joyceh@sph.com.sg @JoyceHooiBT

IREIT Global, a local real estate investment trust, plans to raise gross proceeds of $372.4 million through an initial public offering (IPO) on the mainboard and the issuance of units to cornerstone investors.
In a preliminary prospectus lodged with the Monetary Authority of Singapore, the trust's manager, IREIT Global Group Pte Ltd, said it plans to offer 169,254,000 units at 88 cents apiece. This offering also includes an international placement of units to investors outside the US.
At the same time, Wealthy Fountain Holdings Inc and Tong Jinquan have entered into a separate subscription agreement with the trust's manager to subscribe for a total of 253,882,000 trust units at the offering price. Mr Tong owns Shanghai Summit Pte Ltd, which in turn owns 65 per cent of IREIT Global Group Pte Ltd.
The manager also plans to draw down 96.6 million euros (S$162.5 million) from a term loan facility that it has with DekaBank Deutsche Girozentrale immediately prior to the listing date.

(17-07-2014, 06:45 AM)greengiraffe Wrote: http://www.businesstimes.com.sg/premium/...g-20140717

PUBLISHED JULY 17, 2014
Office Reit eyes mainboard listing
BYJOYCE HOOI
joyceh@sph.com.sg @JoyceHooiBT

IREIT Global, a local real estate investment trust, plans to raise gross proceeds of $372.4 million through an initial public offering (IPO) on the mainboard and the issuance of units to cornerstone investors.
In a preliminary prospectus lodged with the Monetary Authority of Singapore, the trust's manager, IREIT Global Group Pte Ltd, said it plans to offer 169,254,000 units at 88 cents apiece. This offering also includes an international placement of units to investors outside the US.
At the same time, Wealthy Fountain Holdings Inc and Tong Jinquan have entered into a separate subscription agreement with the trust's manager to subscribe for a total of 253,882,000 trust units at the offering price. Mr Tong owns Shanghai Summit Pte Ltd, which in turn owns 65 per cent of IREIT Global Group Pte Ltd.
The manager also plans to draw down 96.6 million euros (S$162.5 million) from a term loan facility that it has with DekaBank Deutsche Girozentrale immediately prior to the listing date.

So this will be the first reit in Singapore with a China listed company as it's sponsor, am I right? Anyone have any views on this, in terms of risks and governance issues wise?

(17-07-2014, 09:10 PM)MINX Wrote:

(17-07-2014, 06:45 AM)greengiraffe Wrote: http://www.businesstimes.com.sg/premium/...g-20140717

PUBLISHED JULY 17, 2014
Office Reit eyes mainboard listing
BYJOYCE HOOI
joyceh@sph.com.sg @JoyceHooiBT

IREIT Global, a local real estate investment trust, plans to raise gross proceeds of $372.4 million through an initial public offering (IPO) on the mainboard and the issuance of units to cornerstone investors.
In a preliminary prospectus lodged with the Monetary Authority of Singapore, the trust's manager, IREIT Global Group Pte Ltd, said it plans to offer 169,254,000 units at 88 cents apiece. This offering also includes an international placement of units to investors outside the US.
At the same time, Wealthy Fountain Holdings Inc and Tong Jinquan have entered into a separate subscription agreement with the trust's manager to subscribe for a total of 253,882,000 trust units at the offering price. Mr Tong owns Shanghai Summit Pte Ltd, which in turn owns 65 per cent of IREIT Global Group Pte Ltd.
The manager also plans to draw down 96.6 million euros (S$162.5 million) from a term loan facility that it has with DekaBank Deutsche Girozentrale immediately prior to the listing date.

So this will be the first reit in Singapore with a China listed company as it's sponsor, am I right? Anyone have any views on this, in terms of risks and governance issues wise?

He controls Viva Trust and owns substantial stakes in numerous listed S-REITs.

IGlobal REIT IPO properties will be entirely in Germany.

http://masnet.mas.gov.sg/opera/sdrprosp....7003AC6DF/$File/Gateway%20Preliminary%20Prospectus%20%2816%20July%202014%29.pdf

I'm pretty skeptical of any REIT that sits outside it's natural jurisdiction. What advantage does a REIT listed in Singapore with Chinese backing have in Germany as opposed to local investors? Too often it seems that these sort of international REITs rely on a cost of capital arbitrage where investors in Asian markets are prepared to buy an identical property at a much lower cap rate than investors in the local market.

That doesn't mean it won't be successful or you can't make money but if I really wanted to invest in German real estate id buy shares listed over there directly myself.

(17-07-2014, 11:03 PM)roxhockey Wrote: I'm pretty skeptical of any REIT that sits outside it's natural jurisdiction. What advantage does a REIT listed in Singapore with Chinese backing have in Germany as opposed to local investors? Too often it seems that these sort of international REITs rely on a cost of capital arbitrage where investors in Asian markets are prepared to buy an identical property at a much lower cap rate than investors in the local market.

That doesn't mean it won't be successful or you can't make money but if I really wanted to invest in German real estate id buy shares listed over there directly myself.

Yeah, probably designed to get money from local market. Only people who benefit are always the managers. Better buy a good dividend paying undervalued property company.

http://www.mingtiandi.com/real-estate/fi...-reit-ipo/

CHINESE DEVELOPER TO BUY 60% OF SINGAPORE REIT IPO

The real estate billionaire behind a Shanghai shopping mall and hotel plans to buy up the majority of an upcoming Singapore REIT offering as China’s property developers continue to look for ways to invest their wealth overseas.

According to a story in Reuters today, Tong Jinquan, the owner of the Longement Hotel and the Cloud Nine shopping complex in Shanghai is planning to invest S$223 million (US$180 million) into the S$372 million (US$299 million) IPO of IREIT Global. The Singapore-listed real estate investment trust is targetting investments in European properties.

Mr Tong, who stayed in school only through the fifth grade, is ranked by Forbes as China’s 36th richest man with a personal wealth estimated at US$2.7 billion, and his Summit Group had total assets of RMB 64.9 billion (10.46 billion) at the end of last year. According to Chinese industry websites, the Shanghai tycoon is among the 10 wealthiest property investors in China.

Tong has shown a strong preference for Singaporean assets, and in addition to his planned role in IREIT Global, has already taken substantial stakes in several other Singapore-listed REITS.

The former worker in a ping pong equipment factory already owns a 64.75 percent of Viva Industrial Trust, 4.58 percent of Suntec Real Estate Investment Trust, 12.93 percent of Cambridge Industrial Trust and 16.20 percent of OUE Commercial Real Estate Investment Trust.

With a portfolio of four properties in Germany, IREIT already has a portfolio of four properties in Germany, and also is expected to have assets in the UK.

As China’s real estate prices have begun to slow, mainland billionaires such as Tong, who made their fortunes in the country’s property markets, have increasingly begun to look overseas for higher returns, or for opportunities to hedge their risks.

Tong probably has his own agenda since his well publicised forays into SGX listed REIT.

IREIT is structured cleverly with high yield appeal to future unit holders in return for a steep premium of $0.88 against $0.78 book value.

Caveat Emptor

(18-07-2014, 10:58 PM)greengiraffe Wrote: Tong probably has his own agenda since his well publicised forays into SGX listed REIT.

IREIT is structured cleverly with high yield appeal to future unit holders in return for a steep premium of $0.88 against $0.78 book value.

Caveat Emptor

Indeed, the IPO price is 1.13P/B when most more established local commercial reits are trading below P/B, which begs the question, what is the X-factor behind this reit that is deserving such a high premium?
The tallest building in it's office portfolio towers at 7 storeys high, vs the 50 storey buildings in local commercial reits.
By the way, the 7.6% yield for forecast period assumes listing date as 1st July 2014. In deriving the 8% yield forecast for FY15 & 16, they assume that the CPI would exceed 10%, isn't Europe strugglng to get out of recession right now or at least anaemic growth?
The sponsor, Mr Ishak will not be subscribing for any shares, in fact the sponsor will hold only one unit which he used to set up this REIT. So much for inspring of confidence and sponsor and unit holders alignment of interest. My 2 cents worth.

I was wondering how this IPO reit can offer a prospective yield of 8% after the german freehold companies have paid 15.825% company tax on the rental income and the reit manager has taken its 10% commission ?

When I check the Colliers website for German Commercial properties now the current market price offering prime yield at 4.5 % - 5.0%

How can a rental yield in Germany at 5% deliver 8% yield when wrapped in a Singapore reit ?

(25-07-2014, 04:21 AM)soros Wrote: I was wondering how this IPO reit can offer a prospective yield of 8% after the german freehold companies have paid 15.825% company tax on the rental income and the reit manager has taken its 10% commission ?

When I check the Colliers website for German Commercial properties now the current market price offering prime yield at 4.5 % - 5.0%

How can a rental yield in Germany at 5% deliver 8% yield when wrapped in a Singapore reit ?

Financial engineering...