Looks like SPH is the latest company to spin off their property assets into a REIT IPO.
The REIT will buy Paragon and the Clementi Mall from SPH for $3.07 billion and is expected to list in early July.
It will hold about $900 million of debt and have a market value of $2.2 billion.
SPH will raise about $450 million and continue to hold about 70% of the REIT after listing.
Singapore REIT has been on a huge bull run for the past one to two years. There had also been a couple of new REIT funds launched, which added to the demand for such counters.
Generally, I don’t find the valuations compelling. At this point in time, I will prefer to sell rather than buy this asset class.
I don’t think so. Some reits still have 5 to 6% yield which is better than bank’s interest.
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Agree with you. I sold all my reits. Yield compression has made them unattractive. Interest rate is going to rise by Oct., heightening the risk of a price collapse going forward.
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