Real estate: It’s raining Reits
Asia’s business community is never slow to spot a trend and real estate investment trusts are certainly hot news. A trickle from the pipeline of early Reit offerings in Singapore and latterly Hong Kong earlier in 2005 threatens to become a torrent of new issues in 2006 as the region’s property developers and investment banks line up to launch new vehicles for Asia’s yield-voracious investors.
In November, after a shaky start, Link Reit, the Hong Kong government’s agglomeration of retail malls and car parks, was greeted with euphoria by Hong Kong’s IPO-mad public. The $2.54 billion IPO was heavily oversubscribed, attracting total orders of $47 billion, including $14.5 billion from the public. The share price has jumped some 40% since trading began, although that has been helped significantly by the revelation that a US hedge fund has built a sizeable stake [see Hong Kong story].
Quickest out of the blocks after the Link Reit stalking horse was Li Ka-Shing with the $246 million IPO of Prosperity Reit, a spin-off of various property interests from flagship developer Cheung Kong Holdings.