Two industrial property IPOs, valued at approximately US$3.7 billion will likely surge when they launch in Singapore this week due to their high yield and exposure to China’s economy.
Global Logistic Properties (GLP), the logistics arm of Singapore sovereign wealth fund GIC, is expected to raise about $3.9 billion (US$3 billion) in Singapore’s second-largest IPO.
Analysts said the company’s shares could soar by about 10 percent when they launch today as it is seen as a good substitute for the exponential trade growth of China.
Meanwhile, units in Mapletree Industrial Trust, whose Singapore properties include factories and other industrial assets, may climb up to $0.99 on their first trading day on Thursday, 6.5 percent higher compared to the IPO price of $0.93, based on the median estimate of five analysts surveyed by Reuters. The listing is expected to raise up to $940 million.
Although the IPOs launch within days of each other, analysts said there is sufficient liquidity to digest both since the two companies appeal to various investors.
“The value proposition is different,” said Vikrant Pandey, an analyst at UOB Kay Hian. “Investors looking for yield and growth in the industrial segment in Singapore would rather go for Mapletree Industrial Trust and investors looking to ride the growth in China would go for GLP.”
GLP is well positioned to tap on China’s economic growth and industrial production boom with its more than 290 logistics assets across China and Japan.
GLP shares will likely rise up to $2.16 on their first trading day, 10 percent higher compared to the offer price of $1.96, according to the median forecast of analysts.
“We expect both GLP and Mapletree Industrial to perform well on their respective first day of trade. Both companies are high profile listings and have substantial institutional support behind them,” said Moh Tze Yang, an analyst at SIAS Research.