Real estate investment trust (REIT) listings could surge more strongly in 2011, with at least six initial offerings (IPO) coming up in Singapore if equity markets stay firm, said a senior banker at HSBC.
These REITS are expected to be of a “decent size”, potentially raising between $500 million and $1 billion each, said Chang Tou Chen, head of global banking and managing director for HSBC Southeast Asia, in an interview with The Business Times.
The new REITs could come from several real estate sectors, including commercial, retail, industrial or hospitality. Some of them could be supported by foreign sponsors and own assets overseas, he said.
Mr. Chang added that at least one REIT could be Syariah-compliant.
“There is an overall desire by MAS (the Monetary Authority of Singapore) to develop Singapore as another centre for raising Islamic-type funds,” he said.
“The Islamic product attracts both conventional and Islamic investors . . . So for issuers, it’s not a hard decision at all.”
Other industry watchers have also voiced optimism on listing activity in the REIT sector in 2011. DBS said in November that at least five REITs could join the Singapore Exchange in the next six months.
Aside from IPOs, existing REITs could conduct more fund-raising exercises next year. Mr. Chang said REITs will likely buy more assets if equity markets stay strong and interest rates remain low, which means that they will need to take on debt or issue new units to fund the purchases.