Real Estate News | Commercial Real Estate
Sabana REIT Plans First $459 Million IPO in Singapore
By Alex Finkelstein | October 28, 2010 8:12 AM ET
Singapore-based Shari'ah Compliant Industrial Real Estate Investment Trust, or Sabana REIT, is thinking big.
The company announced it plans to raise about 600 million Singapore dollars (US $459 million) in an initial public offering on the Singapore Stock Exchange, according to The Wall Street Journal.
If successful, this would be the first Shariah-Compliant listing in Singapore.
Once floated, Sabana REIT is expected to be the largest certified Shariah-compliant REIT in the world, financial sources in Singapore tell the WSJ.
Singapore has been pushing the development of Islamic finance in the city-state, encouraging companies to offer a range of Shariah-compliant products such as bonds and other investments, including REITs.
Shariah REITs only differ from conventional REITs in the type of assets held by the trust.
Sabana REIT's initial portfolio will comprise properties in Singapore that have no connection to activities such as gambling or to products such as alcohol or pork, the WSJ reports.
The REIT plans to acquire a portfolio of properties valued at about 850 million Singapore dollars (US $650 million). The company already has received a conditional eligibility-to-list letter from the Singapore Exchange.
Office buildings with warehouses, logistics warehouses and chemical warehouses may form part of its holdings.
HSBC, United Overseas Bank and Daiwa Capital Markets are advising Sabana on the deal. HSBC is also the sole financial adviser.
Sabana's logistics business, Freight Links Express Holdings Ltd., said it plans a $192.95 million sale in Singapore dollars, and lease-back of five properties to its unit Sabana Investment Partners, which own Sabana REIT.
Freight Links, through its 51% shareholding equity interest in Sabana Investment Partners, said it will participate in Sabana REIT's IPO.