IGB Commercial REIT opens IPO application, says Bursa listing on July 30

KUALA LUMPUR (June 10): IGB Commercial Real Estate Investment Trust (IGB Commercial REIT) said today its initial public offering (IPO) will involve the listing of 2.31 billion units on Bursa Malaysia’s Main Market under a corporate exercise which comprises a restricted offering of up to 945 million units and an institutional offering of at least 282 million units in the property trust.

In filings with Bursa today, IGB Commercial REIT said the property trust’s tentative listing date is on July 30, 2021.

IGB Commercial REIT, which opened its IPO application today, said “applications will be accepted from 10am on June 10, 2021 and will close at 5pm on July 6, 2021".

"All defined terms used herein [in the Bursa filing] shall have the same meanings as those defined in the prospectus issued by IGB Commercial REIT dated June 10, 2021.

"For the avoidance of doubt, there is no balloting of applications,” IGB Commercial REIT said.

IGB Commercial REIT said the restricted offering of up to 945 million units comprises a restricted offer for sale of up to 378 million units at RM1 each to IGB Bhd shareholders on the basis of two restricted offer-for-sale units for every five IGB Bhd shares held besides a distribution-in-specie of up to 567 million units in IGB Commercial REIT on the basis of three distribution-in-specie units for every two restricted offer-for-sale units subscribed.

According to IGB Commercial REIT, the institutional offering of at least 282 million units comprises an offer for sale of 282 million units in the property trust by certain IGB Bhd shareholders besides an offer for sale of unsubscribed restricted offer-for-sale units and the corresponding distribution-in-specie units to institutional investors and selected investors at a price to be determined by book-building.

In a separate statement today, IGB Commercial REIT said that upon listing, the property trust is expected to have a market capitalisation of RM2.31 billion based on the price of the restricted offer-for-sale units at RM1 each.

IGB Commercial REIT claims that the property trust will be the sixth largest Malaysian REIT and the largest stand-alone office REIT by market capitalisation, net lettable area and appraised value.

The sponsor and manager of IGB Commercial REIT are IGB Bhd and IGB REIT Management Sdn Bhd respectively, according to the statement.

"The sponsor and manager have extensive experience in real estate asset management and proven track records in managing and growing listed property funds, i.e. IGB REIT. Under the stewardship of both the sponsor and the manager, IGB REIT has demonstrated growth since its establishment, solely via organic growth.

"The sponsor will hold substantial ownership of at least 50% of IGB Commercial REIT, immediately following the completion of the offering, making it the largest unitholder. Accordingly, the interest of the sponsor will then be aligned with other unitholders,” IGB Commercial REIT said.

IGB REIT Management deputy chief executive officer (CEO) Wong Khim Chon said in the statement that the property trust manager believes that the large size and corresponding free-float of IGB Commercial REIT can enhance the visibility of the REIT among the local and international investment communities.

"We believe that IGB Commercial REIT will be able to leverage IGB Bhd’s track record in developing and operating commercial properties in addition to its financial strength, market reach and network of contacts to further IGB Commercial REIT’s growth,” Wong said.

On April 9, 2021, IGB Bhd said in a Bursa filing that vendors, including IGB Bhd subsidiaries, on that day entered into 10 sale and purchase agreements (SPAs) with MTrustee Bhd for the proposed disposals of 10 properties to IGB Commercial REIT for RM3.16 billion.

The properties are Menara IGB and IGB Annexe, Centrepoint South, Centrepoint North, Boulevard Properties, Gardens South Tower, Gardens North Tower, Southpoint Properties, Menara Tan & Tan, GTower and Hampshire Place Office, according to IGB Bhd.


From: theedgemarkets

the office seems to be oversupply in KL, and with upcoming mega-towers launches and worsen economic outlook, will the office space / leasing continue to be a demand?

This ipo seems non IBG share holder cant apply.

Maybe others can confirm.

office oversupply...

and it's restricted IPO without public balloting done (if I understand correctly)

Guess what, its selling at 70 sen now.

No one has appetite for office reits unfortunately. Wfh cloud still hangs heavily.

luckily no open to public

Cincai compare to another office pureplay like Sentral REIT shows that there are better bargains out there. Higher rev, higher NPI, market cap at 900+M

Meanwhile IGBCR now ~1.6B. Not to say that the properties in it are bad, but the IPO seems to be overpriced. Might consider if it drops to prices that are more comparable to other office reits.

What was the listing price?

Like I said...
Office oversupply...
So it's not surprising at all....

70 sen should be fine, though it could drops further tomorrow.

IPO price RM1 for retails, 71 sen for institutions

Under restrict offer for IGB shareholders, IGBCR is priced at Rm1 and being given 3 dividend in spices for every 2 unit subscribed.

Means IGB existing shareholders can buy 2 unit IGBCR at RM1, and being given 3 free unit.
So average cost would be RM0.40.

Those subscribed the restricted offer still have decent gain.

But IGB was selling like 2.6 before the ex date, even with gains in CR, it has also been cancelled out.
There must a winner, but who?

Not trying to predict near term prices, never been good at that.

Looking at Sentral REIT, 2020 Rev/Net = 164/72.6
2021 Rev/Net on track to replicate 2020 numbers.

Meanwhile IGBCR is forecasting 2021 to be 144.5/55.6

Too lazy to do DCF, but just by looking at P/S and P/E, Sentral trading at P/S 5.7 and P/E 12
You'd need a good reason to be paying more than 800mil for IGBCR, even moreso when it's now double at 1.6B
If based on the logic above, I'd be glad to pick up some if it drops <0.35. If not I think there are other REITs out there that offer you better yield

This post has been edited by HolyAssasin4444: Sep 20 2021, 06:17 PM

Sounds like you can buy at 0.35 by thursday, if it limit down tomorrow and wednesday

Hope so, looking at volume today the stock is pretty much stagnant, completely no sellers below 0.7. Might just be due to 1st day trading, let's see how things are in a week or so

This post has been edited by HolyAssasin4444: Sep 20 2021, 06:30 PM

Seem like 0.48 is the fair value

Should go down more when the major holdings start selling next week

dang, thats the limit down price tomorrow

Won’t be tomorrow but by next week high chances will reach there’s because sentiment toward property is bearishness until we will find out this week plays on

Anyone bought?