Mapletree Greater China Commercial Trust ("MGCCT") finalized its IPO pricing at the top end of the indicative range of 93c. This is due to overwhelming demand for its units by the institutions. The IPO prospectus is here and the announcement by Mapletree is here.
There is a strong support from 11 Cornerstone Investors and the book was well covered. The Public Offer offering of 265,357,000 Units (less 50,304,000 reserved) will open on 9am 28 Feb 2013 and end on 5 March 2013 12pm.
The yield is viewed to be quite attractive versus its key comparable, Link Reit (SEHK:823), which is trading at a yield of about 3.5% today. Hong Kong-listed Link Reit owns and operates a large number of retail assets formerly owned by the Hong Kong government and is viewed as a key comp.
Assuming MGCCT trades at that level, it will imply a good upside of $1.49!
However, I will not be so "greedy" but believe that given the quality of its assets, it deserves a good debut and Link REIT investors should "switch out" of Link and re-invest into MGCCT. A fair value yield of 4.5%-5% will imply a fair trading range of 104 to 116 cents. Having said that, it will be Singapore's largest IPO in 2 years thus I think the upside may be limited by the large float. A debut above $1 will be a good performance for me.