MIT is a Singapore real estate investment trust (“REIT”) established with the principal investment strategy of investing, directly or indirectly, in a diversified portfolio of income-producing real estate used primarily for industrial purposes, whether wholly or partially, in Singapore, as well as real estate-related assets. ( As used in this Prospectus, the term “industrial” refers to properties used primarily for industrial purposes, examples of which include but are not limited to, business park buildings, flatted factories, stack-up/ramp-up buildings, hi-tech and light industrial buildings and general industrial buildings, but excludes properties used primarily for logistics purposes. )
The real estate investment trust is a unit of Mapletree Investments, which is owned by Singapore’s state-run investment company Temasek Holdings Pte. Ltd.
Share statistics
Public Offer: 106,145,000 units
Placement Tranche: 488,768,000 units
Cornerstone investors: 322,578,000 units
Price per unit: S$0.88 – 0.93
Forecast distribution per unit from 21 Oct 10 to 31 Mar 11 is 3.10 cents.
Annualized distribution yield: 7.6% to 8.0% for FY2010/2011 from 21 Oct 10 to 31 Mar 11
Distribution yield: 8.0% to 8.5% for FY2011/2012
Distribution policy: Distribute 100.0% of MIT’s Adjusted Taxable Income for the period from the Listing Date to 31 March 2012. Makes quarterly distributions but first distribution will be for the period from the Listing Date to 31 Dec 10 and will be paid by the Manager on or before 1 Mar 11. (Adjusted Taxable Income would include any issue of Units pursuant to a distribution reinvestment plan. The Manager does not have any immediate intention to implement a distribution reinvestment plan.)
The nine cornerstone investors include APG Tactical Real Estate Poll, American International Assurance Co. Ltd., Henderson Global Investors, Columbia Wanger Asset Management, D.E. Shaw Valence International, Inc, Prudential PLC. These nine cornerstone investors reportedly will subscribe to up to S$300 million worth of units.
Indicative Timetable:
Institutional roadshow: 30 Sep – 8 Oct
Book close 8 Oct (all regions) – Joint book runners reserve the right to close the book early
Expected allocation & MAS registration: 12 Oct
Public Offer: 13 Oct –18 Oct
Listing date: 21 Oct Table 1: Comparison of MIT vs its peers
| Reits | Sector | Mkt Cap (S$m) | Current distribution yield (%) |
Price / Book (x) |
| *Mapletree Industrial Trust | Industrial | 1,287.1-1,360.3 | 7.6-8.0 | 1.0-1.1 |
| Cambridge Industrial Trust | Industrial | 529.1 | 9.0 | 0.9 |
| AREIT | Industrial | 4,008.5 | 6.4 | 1.3 |
| Mapletree Logistics Trust | Logistics | 1,952.4 | 6.9 | 1.0 |
| Cache Logistics Trust | Logistics | 613.99 | 8.0 | 1.2 |
| Ave for industrial trust, excluding Mapletree Industrial | 7.7 | 1.1 | ||
| Ave for all the above reits, excluding Mapletree Industrial | 7.6 | 1.1 | ||
Source: Bloomberg, DBSvickers report, Ernest’s calculations
*For MIT, There is a range in market cap, current distribution yield and price / book, depending on the maximum or minimum offer price
From Table 1 above, it seems that MIT’s yield of 7.6-8.0% is on par with the other Reits. Nevertheless, in view of the large float available and the nature of such investment, clients should be mentally prepared that there may not be huge upside (–> This does not imply that there is definitely an upside to this IPO.) as it is a stable investment with less volatility and with an attractive dividend yield.
Disclaimer
The information contained herein is the writer’s personal opinion and is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. The information or opinions provided herein do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise. You may wish to seek advice from an independent financial adviser before making a commitment to purchase or invest in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein are suitable for you. The writer will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials appended herein. The information and/or materials are provided “as is” without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials.
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