KUALA LUMPUR (Sept 24): IOIPG Malaysia REIT is planning to pay out at least 90% of its distributable income on a quarterly basis, as the real estate investment trust seeks listing on the Main Market.
The trust is listing with properties in Klang Valley and Penang worth RM7.66 billion combined, according to its draft prospectus. The trust also has the right-of-first-refusal to acquire local assets owned by its sponsor IOI Properties Group Bhd (KL:IOIPG).
IOIPG Malaysia REIT will also consider assets of other owners though the priority will be retail, office, industrial and hospitality properties in urban and suburban areas in Malaysia.
The proposed initial public offering (IPO) will allow IOI Properties Group to trim its debt from an acquisition spree involving over RM1 billion in 2024. The developer is also considering spinning off its Singapore properties worth RM26 billion into another real estate investment trust.
The listing of IOIPG Malaysia REIT was approved by the Securities Commission last month and the target was to complete the listing before the year ends.
The IPO will be split into retail and institutional tranches, offering up to 40% of the total issued fund size upon listing. Institutional investors, including cornerstone investors, will be allocated 27% of the total units.
Cornerstone investors — typically large institutional investors such as pension funds and insurers — commit to taking up a portion of the IPO shares before they are marketed to other retail and institutional investors. Their presence helps to build up other investors’ confidence to invest in the IPO.
Under the retail tranche, shareholders of IOI Properties Group are entitled to 10% of the units on offer on the basis of one unit for every 10 existing shares of the developer held on a date to be determined later.
The Malaysian public will only be allocated 2%, while eligible persons under pink form allocation get up to 1% of total units.
Net proceeds from the listing will accrue entirely to IOI Properties Group after covering estimated listing expenses totalling about RM4 million.
Maybank Investment Bank and AmInvestment Bank are the joint principal advisers, global coordinators, bookrunners, managing underwriters and underwriters.
DBS Bank is the joint global coordinator and joint bookrunner. CIMB Investment Bank, Hong Leong Investment Bank, RHB Investment Bank and UOB Kay Hian are the joint bookrunners and underwriters. Oversea-Chinese Banking Corp is also one of the bookrunners.