Friday, July 12, 2013

SPH REIT - Yield Comparison with Industry Peers

MEDIA group Singapore Press Holdings (SPH) filed its preliminary prospectus for its retail mall real estate investment trust (Reit). The IPO is expected to raise between $523 million and $554 million, with an offer of 308.9 million units at between 85 and 90 cents each.
SPH will inject Paragon and Clementi Mall into the Reit for $2.5 billion and $570.5 million respectively. The IPO proceeds will be mainly used to acquire the properties, and for transaction costs and property-related expense
Below is a comparison of SPH REIT vs other Reits that is already in the market
SPH REIT Quick Facts
Sponsor:                         Singapore Press Holdings

Sponsor stake post IPO:         70%, Free float 30%

REIT manager:                 SPH REIT Management

Leverage:                         27.3 - 31.3%

Revenue breakdown:         97% of gross retail rent linked to contracted base rent, 3% tied to retail sales

Yield Comparison with Industry Peers

SPH REIT's indicative yield stands at 5.58%-5.79%, which is largely in line with its retail S-REITs peers, as illustrated in the following chart:

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