Singapore Press Holdings will be looking to raise S$504 million via an initial public offering of its retail assets today. SPH REIT is priced at $0.90 and will commence trading at 2p.m. this afternoon.
 
Macquarie has listed two warrants over SPH REIT which will start trading at the same time as the shares.

According to the prospectus, the REIT is offering a yield of 5.79% based on fiscal 2014 projections. The Straits Times reported that “the projected yield compares well to those of other retail mall REITs such as CapitaMall Trust and Frasers Centrepoint Trust”.
 
SPH REIT has Paragon Mall and Clementi Mall under its portfolio, allowing investors to gain exposure to the success of these retail properties. The two malls enjoy 100% occupancy as of 28 Feb 2013.
 
Strategy to sustain income distribution
The prospectus states that to be able to provide regular and stable distributions to investors, the manager of SPH REIT will do so via:
 
Active management of SPH REIT’s properties. The manager will look to actively optimise the tenant mix in the properties and provide periodic refurbishment when appropriate.
 
Investments and acquisition growth strategy. The Seletar Mall is one example which may be suitable to be acquired by SPH REIT in future.
 
Capital and risk management. The manager will look for alternative venues to manage and source capital so as to maximise overall returns for holders.
 
When SPH previously announced intentions of establishing a REIT after the markets shut on 10 March, investors immediately responded by buying into the publishing company once the trading session started on 11 March. Volumes that day surged above the 15-day moving average and the shares jumped 3.4% in a single day.

Source: Macquarie Research - 24 Jul 2013