Sunway REIT set for July 8 listing

Malaysia's largest real estate investment trust, Sunway REIT, will finally be listed on July 8 2010, some five-and-a-half years after the plan was first announced.

With properties valued at RM2.6 billion to be injected into it, Sunway REIT has secured four cornerstone investors who will together buy 14 per cent of the 2.78 billion units to be listed.

They include Singapore's investment firm GIC, the Employees Provident Fund (EPF), Permodalan Nasional Bhd (PNB) and Great Eastern Life Assurance (Malaysia) Bhd.

Cornerstone investors usually participate in large initial public offerings (IPOs) and unlike institutional investors, they have a confirmed allocation.

Cornerstone investors are said to be more common in Hong Kong and Singapore. It is understood that cornerstone investors emerged during the Maxis Bhd IPO.
"Cornerstone investors have become a trend. I don't think Sunway REIT needs the cornerstone investors but it adds good gloss over the whole transaction," a banker said.

"Sunway REIT have these cornerstone investors to kick off the momentum that the big blue-chip investors are keen in this REIT and this also adds credibility to the REIT," he said.

The four cornerstone investors will buy a total of 376 million units. They will pay the lower of the institutional price and 98 sen.

In total, there will be some 1.65 billion units for public subscription, of which 134 million are for retail investors and 1.52 billion for institutional investors.

Based on the indicative retail price of 97 sen, the total market capitalisation of Sunway REIT upon listing is estimated at RM2.6 billion.

Properties that will form part of the REIT include the Sunway Pyramid Shopping Mall, SunCity Ipoh Hypermarket, Sunway Resort Hotel & Spa, Pyramid Tower Hotel and Sunway Hotel Seberang Jaya.

Its office properties will include Menara Sunway and Sunway Tower.

By Business Times