21-07-2012, 10:12 AM
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The Straits Times
www.straitstimes.com
Published on Jul 21, 2012
Pre-marketing begins for Far East Reit's $700m IPO
HONG KONG - Far East Reit, a hospitality trust launched by Singapore's largest privately owned property developer, yesterday started pre-marketing an initial public offering (IPO) of up to $700 million.
It is betting on demand from yield-hungry investors burnt by volatile global markets.
With interest rates around the world hovering near record-lows, the fixed return on real estate investment trusts (Reits) are helping lure investors amid an uncertain outlook for equities.
The MSCI World Index has fallen nearly 7 per cent since its March peak because of concerns over Europe's debt crisis and China's economic slowdown.
The Reit, which owns hotels and serviced residences in Singapore, is being marketed at a yield of 6 to 6.5 per cent, said a source with knowledge of the deal who was not authorised to speak publicly on the matter.
The yield is slightly below the 6.63 per cent average for all Reits listed in Singapore.
'It's still a relatively risk- averse environment so Reits are something that people are looking at because they give good yields,' said Mr Lee Wee Liat, head of property research at BNP Paribas Securities (Asia) in Hong Kong.
'Sentiment has been pretty sizeably affected by the slowdown in China recently, so the interest is diverted to South-east Asia and Singapore as a capital- raising platform.'
The yield for the Far East Reit compares with about 7.9 per cent offered for Ascendas Hospitality Trust's deal this week and 6 per cent for CDL Hospitality Trust.
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The Straits Times
www.straitstimes.com
Published on Jul 21, 2012
Pre-marketing begins for Far East Reit's $700m IPO
HONG KONG - Far East Reit, a hospitality trust launched by Singapore's largest privately owned property developer, yesterday started pre-marketing an initial public offering (IPO) of up to $700 million.
It is betting on demand from yield-hungry investors burnt by volatile global markets.
With interest rates around the world hovering near record-lows, the fixed return on real estate investment trusts (Reits) are helping lure investors amid an uncertain outlook for equities.
The MSCI World Index has fallen nearly 7 per cent since its March peak because of concerns over Europe's debt crisis and China's economic slowdown.
The Reit, which owns hotels and serviced residences in Singapore, is being marketed at a yield of 6 to 6.5 per cent, said a source with knowledge of the deal who was not authorised to speak publicly on the matter.
The yield is slightly below the 6.63 per cent average for all Reits listed in Singapore.
'It's still a relatively risk- averse environment so Reits are something that people are looking at because they give good yields,' said Mr Lee Wee Liat, head of property research at BNP Paribas Securities (Asia) in Hong Kong.
'Sentiment has been pretty sizeably affected by the slowdown in China recently, so the interest is diverted to South-east Asia and Singapore as a capital- raising platform.'
The yield for the Far East Reit compares with about 7.9 per cent offered for Ascendas Hospitality Trust's deal this week and 6 per cent for CDL Hospitality Trust.
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