Sunway REIT to sell shares at 90 sen each

SUNWAY Real Estate Investment Trust, controlled by Malaysian property and hotel group Sunway City Bhd, is selling shares at 90 sen each to institutional investors in an initial public offering, according to four people with knowledge of the matter.

The price is at the low end of the 90 sen to 98 sen range marketed to investors, said the people who declined to be identified as the details are private. The sale is being managed by a group of banks led by Credit Suisse Group AG and RHB Capital Bhd.

The IPO is set to top Masterskill Education Group Bhd’s RM771.4 million sale in May, and underscores rising investor appetite for stocks in the Southeast Asian nation amid an economic rebound from last year’s recession. Sunway REIT will begin trading next month and join 12 other REITs listed on the Kuala Lumpur stock exchange.

“Sunway REIT is a defensive REIT that will offer unit-holders a longer term growth catalyst,” Mervin Chow Yan Hoong, an analyst at OSK Research Sdn Bhd, said in a report June 22. “Malaysians are great shoppers and the recent global recession may have only slightly curbed this tendency.”

The Malaysian property trust includes shopping malls and hotels valued at RM3.7 billion, making it the biggest REIT in the country by asset value. Its Sunway Pyramid Shopping Mall is the biggest in Malaysia by net lettable area, according to OSK. More than 70 per cent of Sunway REIT’s income is derived from its retail properties.

By Bloomberg