Ascendas raises S$500 m in S'pore mkt

MUMBAI: Ascendas India Trust, the first India focused real estate investment trust (REIT), has raised S$500 million from the Singapore market. The units were priced at S$1.18.

The IPO comprises an international tranche of 392.10 million shares and a retail tranche of 31.28 million. The trust is owned and sponsored by industrial land-owners Ascendas Pte, a unit of Singapore government-owned industrial land-owner JTC Corp.

At a price of S$1.18 per unit, the trust will pay an yield of 4.75% based on the trusts’ 2008 distribution forecast.

JP Morgan was the sole financial advisor for the offering, while Citigroup and DBS were joint underwriters. “The existing income-producing portfolio offers investors stable income distribution. It also provides upside growth.

Strong demand comes as investors are keen to participate in India’s economic boom and the trust is a gateway for many investors who previously had no direct access to the country’s real estate market,” JP Morgan officials said.
Currently, many Indian real estate firms such as DLF are exploring possibilities to float REITs in the Singapore market. Though Singapore, with its investor-friendly regulations, appears to be the most likely choice for many,

Hong Kong is also a favourite with many real estate firms.

Companies like Unitech, Hiranandani, Indiabulls Real Estate and K Raheja Corp have already tapped Alternative Investment Market (AIM), the sub-market of London Stock Exchange (LSE), to raise funds and develop properties in India.

The Singapore-based REIT CapitaLand has already invested $100 million in Runwal group’s residential project in Mumbai. A REIT operation is similar to what mutual funds provide on stock investments. REITs are required to distribute their high proportion of earnings as dividend.

In India , market regulator Sebi had made a policy announcement regarding real estate mutual funds, but operational guidelines are yet to be announced.

Ascendas India Trust owns business parks in various Indian states. Its initial asset portfolio includes information technology business parks in Bangalore, Chennai and Hyderabad with a combined built-up area of 3.6 million square feet.

The group is developing another 1.1 million square feet of business parks and has sites with a potential built-up area of 4.2 million square feet. Ascendas India’s portfolio of properties consists 80% of the completed properties while the reaming 20% is in the developing stage.