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Reits are on the rise in Singapore. The S$276 million IPO (including greenshoe) of Ascendas real estate investment trust (A-Reit) - the first industrial Reit in nonJapan Asia - was a healthy five times over-- subscribed, gathering strong support from overseas and domestic investors.
Lead underwriters, DBS, JPMorgan and Salomon Smith Barney, had no difficulty selling the fund's high yield story. In a time of volatile equity markets and record low interest rates, the promise of an 8% dividend yield was particularly attractive in Singapore and internationally. Based on the rental income of eight industrial properties in Singapore, the 272.5 million shares sold at the tight end of the indicative range at 88 cents per unit.
The fund manager,Ascendas-MGM Funds Management, comprises a joint venture between Singapore's Ascendas and Australia's Macquarie Goodman. Goh Kok Huat, CEO of the fund, underlines the benefits for the property company: "For Ascendas, the...