IGB Reit IPO oversubscribed

Malaysian Issuing House Sdn Bhd announce that the initial public offering (IPO) of IGB Reit under which 34 million offer units were made available for application by the Malaysian public has been oversubscribed.

The offering of IGB Reit involves the issuance of 670 million new units, it said in a statement.

A total of 32,781 applications for 773.57 million offer units were received from the Malaysian Public for a total of 34 million offer units reserved for public subscription, representing an oversubscription rate of 21.75 times.

A total of 387 applications for 44.08 million units were received from application by the eligible directors and employees of the eligible subsidaries of the sponsor under the Reserved Units, which represents a subscription rate of
94 per cent.

A total of 2,339 applicants for 98.40 million offer units were received under the eligible shareholders of sponsor category which represents a subscription rate of 82 per cent.

The Joint Bookrunners for the offering have confirmed that the institutional offering of 469 million offer units has also been oversubscribed.

Following the completion of the bookbuilding exercise under the institutional offering, the institutional price was fixed at RM1.25 per unit.

Accordingly, the final retail price for the retail offering was fixed at RM1.25 per offer unit.

All notices of allotment for the offer units under the retail offering will be mailed to successful applicants before Sept 20, 2012. — BERNAMA

IGB REIT may price IPO at RM1.25

Malaysia’s IGB Real Estate Investment Trust has priced its initial public offering to institutional investors at the top of an indicative range, sources with direct knowledge of the deal told Reuters on Thursday.

The IGB REIT priced the IPO at 1.25 ringgit per unit, at the top of the RM1.15-RM1.25 range set for the tranche focused on large investors such as pension and mutual funds, said the sources, who declined to be identified as they were not authorized to speak publicly on the matter.

The company benefited from booming demand for the deal, Malaysia’s fourth-largest IPO this year, with the offering covered “multiple times”, sources have previously said. – Reuters

IGB REIT's IPO said oversubscribed

The institutional tranche of Malaysia's IGB Real Estate Investment Trust's US$266 million listing is already oversubscribed, said two sources with direct knowledge of the matter, signaling strong demand for the deal.

The deal is set to be Malaysia's fourth largest IPO this year and the REIT may become the Southeast Asian nation's largest REIT with a possible market value of up to RM4.25 billion (US$1.4 billion), topping Pavilion Real Estate Investment Trust's RM4.05 billion.

The IGB REIT offered 469 million shares, or 70 percent, of its 670 million IPO shares to institutions at a price range of RM1.15-RM1.25 per unit.

The sources said the offer had been covered "multiple times".

"Most is covered at the top range," said one of the sources, who declined to be identified as the matter is not meant to be public.

A second source added that the subscriptions were evenly split between foreign and local investors.

The offer, which opened on Aug. 28, will close on Sept 6.

The retail portion, offered at a maximum price of RM1.25 per unit, closes on Tuesday, according to a term sheet seen earlier by Reuters.

The property trust, which owns two Kuala Lumpur shopping malls — the Mid Valley Megamall and the Gardens Mall — hired CIMB Investment Bank and Hong Leong Investment Bank as the principal advisers and joint managing underwriters for the IPO.

CIMB, Credit Suisse and Hong Leong are the joint global coordinators. CIMB, Citigroup, Credit Suisse, DBS, Deutsche Bank, Goldman Sachs, Hong Leong, HSBC, JP Morgan and Maybank are the joint book runners.

The joint underwriters are AmInvestment, CIMB, Hong Leong and Maybank. – Reuters

IGB REIT may buy properties in the US and Europe

IGB Real Estate Investment Trust (IGB REIT) may consider inorganic expansion opportunities such as acquisitions in the United States or Europe in view of the dire financial situation there.

"In Europe or the United States you can get some properties at way below replacement costs. That is an area we can pursue for potential acquisitions.

"But what we prefer is to construct the mall ourselves and manage it before injecting it into the REIT," IGB REIT Management Sdn Bhd
managing director Robert Tan said at the launch of the IGB REIT prospectus here yesterday.

IGB REIT Management is the company that will manage IGB REIT.

IGB REIT is a unit of IGB Corp Bhd and Tan is also group managing director of IGB Corp.

Based on the retail price of RM1.25 per unit, IGB REIT will provide a distribution yield of 5.1% on an annualised basis for the six-month forecast period ending Dec 31.

"We have to ensure that The Gardens and the Mid Valley Megamall are well-managed. Hopefully these investments will continue to see year-on-year growth and thereafter we will look at acquisitions," Tan said.

A total of 670 million units of IGB REIT will be offered. Upon listing, IGB REIT will become the largest retail REIT in Malaysia with an asset value of RM4.6bil.

The listing will see the REIT being offered to institutional shareholders (13.8%), eligible IGB shareholders (3.5%), eligible directors and employees (1.4%) while the Malaysian public will have the smallest share allocation of 1%.

The opening date for the institutional offering will be on Aug 28 and the closing date on Sept 6.

Balloting for the retail portion will be conducted on Sept 7 and IGB REIT will be listed on Sept 21.

The Mid Valley Megamall has an appraised value of RM3.44bil with net lettable area of 1.72 million sq ft and an occupancy rate of 99.8%, It has 6,092 car park bays.

The Gardens has an appraised value of RM1.16bil with net lettable area of 817,053 sq ft and an occupancy rate of 99.7%. It has 4,128 car park bays.

IGB REIT to grow retail assets

IGB Real Estate Investment Trust (REIT), a unit of property developer IGB Corporation Bhd and en route to a listing on Bursa Malaysia's Main Market, will focus actively on growing its two retail assets as its main strategy in the next few years besides considering potential acquisitions overseas.

IGB Corp's 75 per cent subsidiary KrisAssets Holdings Bhd, which owns the two retail assets under the IGB REIT — Mid Valley Megamall and The Gardens Mall — has formed IGB REIT Management Sdn Bhd to manage and set the strategic direction of the trust.

"Both the assets have a long way to go as it takes time for the properties to mature.

"After listing, we have to make sure these properties are well managed and investors see a year-to-year growth of about 5-8 per cent of our revenue given the increasing competition," IGB REIT Management Sdn Bhd Managing Director Robert C M Tan told reporters at the trust's prospectus launch.

However, if any potential opportunities arise for acquisition locally or overseas, the manager would look into it under the REIT, he said.

"At the moment, the Europe and United States markets have good deals and we can look at some properties there for acquisition, preferably completed or mostly conpleted properties," he said adding that it would prefer to construct and manage the properties.

He also said the recent acquisition of Southkey Megamall Sdn Bhd would take about three to five years from now to develop.

IGB REIT is set to be Malaysia's largest retail REIT by asset value with the listing slated on Sept 21.

The trust, which offers 670 million units at an initial retail price of RM1.25 per unit, is expected to raise RM837.5 million from the initial public offering with a forecast 5.1 per cent yield annualised.

"The offer price is a fair deal looking at other REITs' performance, and we are very conservative when it comes to pricing," Tan said.

He said the listing would provide an avenue for investors to invest in one of the largest REITs in Malaysia with a total net lettable area of approximately 2.5 million sq ft (232,258 sq m).

Upon listing, IGB REIT is expected to achieve a market capitalisation of RM4.25 billion.

IGB Corp is optimistic of its retail property market given the continuous earnings growth against the backdrop of uncertainties in the global economy and competition, he added. — Bernama