Perennial China Retail Trust lodged the prospectus for its planned S$1.1 billion ($861 million) initial public offering in Singapore, in what is likely to be the first of several large asset-backed trust IPOs in the city-state.
Perennial China, managed by former CapitaLand shopping mall chief Pua Seck Guan, is offering 1.1 billion shares at S$1.00 apiece. Seven cornerstone investors, including Cosmo Top and Prudential , will take up 43 percent of the available shares.
The trust will have stakes in five properties, three of them in the northeastern Chinese city of Shenyang. Only one of the five properties, the Shenyang Red Star Macalline Furniture Mall, is completed, while another mall is scheduled to start operations in the second quarter of this year.
Perennial China offers a pure-play exposure in the high retail sales growth in the People's Republic of China, the trust said in its IPO prospectus.
The properties have the potential to generate attractive rental and capital growth over time as spending within the malls' shopper catchments increases, driven by ongoing urbanisation of the population and growing disposable income per capita.
Perennial China's IPO is expected to be the first of several large trust IPOs in Singapore, a popular destination for trusts because of favourable rules such as lower taxes on distribution.
Hong Kong billionaire Li Ka-shing's Hutchison Whampoa is expected to launch a $6 billion IPO of its port assets packaged as a business trust , while Singapore state investor Temasek's Mapletree is planning a $1 billion-plus property trust IPO whose assets include Vivocity, Singapore's largest shopping mall.
The Perennial China IPO is scheduled to close on March 14 and the shares are expected to start trading on March 16, the prospectus said.
Its other cornerstone investors are CBRE, Henderson Global , AIA , Singapore fund manager Lion Global and property investor AEW.
Goldman Sachs , Standard Chartered and DBS are the managers of the IPO.
Pua, who is widely credited with building CapitaLand's malls business, resigned from Southeast Asia's biggest developer in September 2008, sparking a 7 percent fall in the firm's share price.
Besides the planned China property trust, Pua's Perennial is currently leading the re-development of three commercial properties in Singapore and it has set up unlisted China funds whose backers include the Beijing Hualian Group. ($1 = 1.277 Singapore Dollars)