CICC Assists with UK -Focused Elite Commercial REIT’s IPO
On February 6th 2020, Elite Commercial REIT successfully completed its initial public offering and listing on the Singapore Stock Exchange, with an offering size of GBP 131 million (pre-shoe). The sponsors are Singapore-based private equity fund Elite Partners Holding, whose shareholders and financiers include the Super Coffee family in Singapore, as well as Singapore-based real estate developer Ho Lee Group, and Sunway RE Capital, part of the Malaysian conglomerate Sunway Berhad. It is the first UK-focused REIT denominated in GBP listed on the SGX. CICC acted as Joint Bookrunner and Joint Lead Underwriter for this transaction.
The IPO portfolio comprises 97 office buildings across UK, 96 of which are freehold, while the remaining one has a remaining lease of 235 years. Total NIA is c. 2.6m sqft, with appraised value of GBP 319m. The portfolio has an occupancy rate of 100%, with a WALE of 8.6 years, and is 99% leased to the largest government department in UK – the Department of Work and Pension. The forecasted yield of the REIT for 2020 and 2021 is 7.1% and 7.2% respectively.
The three sponsors of the REIT have strong experience in real estate development and investment. For example, Ho Lee Group is one of the major real estate developers in Singapore, and also one of the major sponsors for Viva Industrial Trust’s SGX IPO in 2013. The parent company of the other sponsor Sunway RE Capital is Sunway Berhad, one of the largest conglomerates in Malaysia that has three listed subsidiaries with a combined market capitalization of c. USD 4bn.
As the only Chinese bank in this transaction, CICC fully mobilized its global sales and wealth management, helped investors better appreciate the investment merits of REIT product and the value of UK assets after Brexit, and played a vital role in securing demand from high-quality institutional investors, including the single largest order from institution investors, which contributes to the successful closing of the deal despite the challenging market window.
The IPO of Elite Commercial REIT is another classic example of CICC rendering services to international clients. As the only investment bank that has completed REIT IPOs for assets in China, US and UK, CICC has further enhanced the franchise in Singapore and secured its leading position in the REIT IPO league table in Singapore.
As a leading investment bank with “China Roots, International Reach”, CICC will continue to utilize its capital market expertise as well as its seamless cooperation of onshore and offshore businesses, and continue to provide high-quality financial services for more enterprises.