Mapletree unit launches combo equity deal

Mapletree Commercial Trust raises S$529 million from a private placement of new units and is seeking another S$504 million from a preferential offering next month.

Singapore-listed Mapletree Commercial Trust is planning to raise S$1 billion ($751 million) from a pair of equity offerings, taking advantage of investors' desire for a safe yield play.

The trust turned to a mix of new and old investors for its latest capital-raising, closing a private placement of 364.8 million new investment units and launching a non-renounceable preferential offering of 362.8 million investment units to existing unitholders.

The rights portion of the deal is still being considered by investors, but the private placement got a strong response, generating orders worth more than 3.8 times the value of the deal. That should come as little surprise — investors have shown an increasing appetite for safe, yield-paying assets over the last month.

Fund managers and private capital have flocked to safe assets following the United Kingdom’s surprise decision to depart from the European Union. Singapore’s SGX S-Reit Index has gained 6.4% since the Brexit vote on June 23.

Analysts expect real estate investment trusts to remain favoured assets throughout the year, given the myriad sources of uncertainty investors have to worry about at the moment. These include the US presidential election, the Federal Reserve’s timing of future rate hikes, and the still-unclear development of the UK’s exit from the EU.

MCT’s deal will add to the $1.4 billion worth of equity raised from the initial public offerings of Manulife US ReitFrasers Logistics & Industrial Trust and EC World Reit so far this year.


The private placement was conducted through an accelerated bookbuild to selected investors after the Singapore stock market closed on Tuesday. The units were marketed at S1.41-S$1.45 at launch before being finalised at the top of that range. That raised S$529 million for Mapletree Commercial Trust, or MCT.

The final placement price represented a 3.3% discount to the stock’s S$1.499 three-month volume weighted average price (VWAP), according to a termsheet seen by FinanceAsia. The order book was 3.8 times subscribed and received strong participation from both existing and new unitholders, the company said in a statement on Wednesday.

The allocation of the deal was skewed towards long-only investors and existing unitholders from Asia and the US, a banker familiar with the deal said.

Having completed stage one of its fundraising plan, MCT is now targeting S$515 million from the sale of new units to existing holders through the preferential offering. According to the terms, each unitholder will be entitled to 17 new units for every 100 units they already hold.

The units will be sold for S$1.42 each, offering investors a discount of 5.3% to the three-month VWAP. Existing unitholders have to to register by August 3 to participate in the preferential offer.


MCT plans to use the proceeds from the equity fundraising to settle the S$1.78 billion acquisition of Mapletree Business City, an office and business park complex located in southern Singapore with a net leasable area of 1.7 million square feet.

The acquisition will increase Mapletree Commercial Trust’s distribution per unit by 3.2%, distribution yield by 20bp and net asset value by 2.1%, according to a corporate presentation.

In addition, MCT expects the acquisition to increase its free float and potentially improve the stock’s weighting in key Reit indices, thereby attracting more demand from index funds. 

MCT is the sixth largest constituent of the SGX S-Reit Index, with a 4.7% weighting.

MCT will add Mapletree Business City to its present four properties in Singapore, comprising  shopping mall VivoCity and three office buildings: Bank of Amercia Merrill Lynch HarbourFront, the PSA Building and Mapletree Anson.

DBSGoldman Sachs and HSBC managed the private placement, and are running MCT’s rights issue.

¬ Haymarket Media Limited. All rights reserved.
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