China Merchants breaks five-year REIT listing drought for HK

November 29, 2019 09:50
Hong Kong stock exchange is set to see its first REIT listing since December 2014. Photo: Bloomberg

Hong Kong is set to welcome its first listing of a real estate investment trust in five years, with the China Merchants Commercial REIT seeking to raise up to US$400 million, Reuters reports.

The REIT, which owns five commercial and office properties in Shenzhen and wants to expand in the Greater Bay Area, plans to issue 750 million units priced between HK$3.42 and HK$4 each, the report said, citing a term sheet.

That would put the deal in the US$330 million to US$380 million range. A greenshoe option of 5 percent of units outstanding could lift the deal value to US$400 million.

Singapore has long been seen the Asian hub for REITs, and Hong Kong has just 11 listed.

The last Hong Kong REIT listing was December 2014, when Dalian Wanda raised US$4 billion which was the largest on record for the city, according to data from Refinitiv.

China Merchants Commercial REIT executives started briefing investors in Hong Kong on Thursday and will shift to Singapore on Friday ahead of the deal progressing next week.

The bookbuild has begun and the units are expected to be priced on Tuesday, with trade due to start on Dec. 10.

Hong Kong’s IPO market has seen US$21.8 billion raised so far this year, on par with the New York Stock Exchange and just behind the Nasdaq’s US$23.6 billion.

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