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May 30, 2017

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Li Ka-shing-backed real estate trust to launch Singapore's 1st yuan-based initial public offering

SINGAPORE--A real estate investment trust backed by Hong Kong tycoon Li Ka-shing announced Wednesday it hopes to raise around US$800 million in a yuan-denominated initial public offering in Singapore.

The offer by Dynasty REIT will be the first yuan-denominated flotation in the affluent city-state and the second outside mainland China.

Dynasty REIT, which is sponsored by real estate fund manager ARA Asset Management Ltd, lodged its prospectus on Wednesday with the Monetary Authority of Singapore (MAS) in preparation for the IPO.

ARA is an affiliate of the Cheung Kong Group, whose chairman is Li, Hong Kong's richest man.

No date was given for the share offer.

Dynasty REIT will offer between 893.9 million and 901.3 million units to public and institutional investors at a price range of 4.40-4.70 yuan apiece, according to the preliminary prospectus.

Additional units will be subscribed to by the sponsor and a group of "cornerstone" investors.

Total proceeds from the offer should range between 5.05 billion yuan and 5.39 billion yuan (US$802 million to US$857 million), the prospectus said.

The units will be tradable in yuan, officially called the renminbi, and Singapore dollars.

"Dynasty REIT will be the first renminbi-denominated REIT listed on the SGX-ST and offers investors unique exposure to the potential appreciation of (the) renminbi," the prospectus said.

Li and Singapore-listed ARA were also involved in the first offshore yuan IPO through last year's US$1.6 billion offering in Hong Kong of Hui Xian REIT, which has stakes in Beijing office properties, Dow Jones Newswires said.

If successful, Dynasty REIT's IPO would be the largest in Singapore this year, surpassing a US$526 million flotation by Far East Hospitality Trust in August, it added.

Singapore is aiming to be an alternative to Hong Kong as a trading hub for the fast-growing offshore yuan market.

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