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Elite Commercial files preliminary prospectus for IPO in Singapore

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Capital Markets View – January 2021


Elite Commercial files preliminary prospectus for IPO in Singapore

Elite Commercial REIT Management filed a preliminary prospectus to list a U.K.-focused real estate investment trust on the main board of the Singapore stock exchange, The Business Times reported Jan. 18.

The REIT comprises 97 properties, which are mostly freehold. The preliminary prospectus, which was filed Jan. 17, did not contain information on pricing or issuance size, but the publication previously reported that Elite Commercial REIT Management was looking to raise about £150 million via the IPO.

The trust's initial portfolio has a total net internal area of roughly 2.6 million square feet on an around 47-hectare site, according to the preliminary prospectus. As of Aug. 31, 2019, it has an aggregate indicative appraised value of £319.1 million.

Elite Commercial said that the IPO portfolio will have a net property income yield of 7.1%, based on the company's 2020 forecast, while its net property income is expected to be £22.7 million a year for 2020 and 2021. Its projected distributable income is £16.2 million for the 2020 full year and £16.6 million for 2021.

As of the date of the prospectus, the REIT had 95 million units in issue held by private trust investors, including Ho Lee Group Trust, Sunway RE Capital and Kim Seng Holdings.

The cornerstone investors, UBS AG's Singapore and Hong Kong branch, Bank of Singapore and CIMB's Singapore branch, have agreed to subscribe for some 77.83 million units at the offer price on behalf of their private banking clients, the publication reported.

If the offering proceeds, the trust will be the first British pound-denominated REIT to be listed in Singapore. It is expected to have gross borrowings of about £97.5 million as at the listing date.

Elite Partners Holdings, Ho Lee Group and a wholly owned unit of Sunway Group are the REIT's sponsors.