MacarthurCook REIT closes over-subscribed

MacarthurCook’s latest Asian real estate investment trust (REIT) has closed massively oversubscribed after raising Sing$312.5 million in just six days.

The retail offering of 7,500,000 units at Sing$1.20 was oversubscribed by 37 times, MacarthurCook managing director Craig Dunstan told Money Management.

“The institutional offering was oversubscribed by 2.1 times, and we attracted funds from Europe, Australia, the Gulf, Hong Kong and Singapore for the REIT IPO [initial public offering].”

The industrial REIT will be buying 12 industrial properties in Singapore.

The properties are fully let on long-term leases and range in size from 5,500 square metres to 65,000 square metres.

Purchase prices for the industrial units ranged from Sing$8.3 million to $115 million, and initial yields were about 7 per cent.

Dunstan said he was pleased with the strong response to the fund manager’s latest Asian offering.

“The response demonstrates investor’s confidence in our investment strategy, which focuses on the high-growth industrial sector in Asia,” he said.

“We are further heartened by the fact quality investors have recognised the REIT’s strong investment theme and growth prospects.”

The forecast yield of the REIT for the 2008 financial year is projected at 8.18 per cent, while in 2009 this is expected to rise to 6.32 per cent.

The REIT is listing on the Singapore exchange this afternoon in lots of 1,000 units.

Dunstan said plans for the REIT was to keep a minimum of 40 per cent of the assets in Singapore and look for further industrial properties in Hong Kong, China, Malaysia, Japan and India.

“Out target is to grow the trust by up to Sing$500 million in new investments a year,” he said.

As part of the growth plans in Asia, MacarthurCook has moved its head of property to become chief executive officer of the Singapore operation.

Dunstan said the fund manager was looking at further Asian REITs and would not be drawn on which sectors they would move into.

“Our Singapore business is expanding, as there is a considerable investment capacity in Asia for REITs,” he said.

“We are giving Asian investors the opportunity to invest in Asian and Australian real estate.”

Dunstan said the fund manager would probably start looking at Europe for some future REITs next year, which would be available to both Asian and Australian investors.

MacarthurCook now has $1.4 billion of funds under management after the latest capital raising.