Manulife US REIT to tap Singapore’s IPO Market

Posted by Staff Reporter ( on May 06, 2016 10:07 PM EDT
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Manulife Financial LPGA Classic - Final Round more big
WATERLOO, ON - JUNE 8: Belen Mozo of Spain throws golf balls into the crowd on the 18th green after the final round of the Manulife Financial LPGA Classic at the Grey Silo Golf Course on June 8, 2014 in Waterloo, Ontario, Canada. (Photo : Steve Dykes/Getty Images)

Real estate market is one of the places where investors see some security for their money. Amid a weak global economy and falling oil prices that affected many countries, investors want to safeguard their investment by divesting into the property market. Manulife could take advantage of this.

As reported by The Wall Street Journal, Manulife US Real Estate Management Pte. Ltd. is planning to launch an initial public offering (IPO) in Singapore, which aims to generate as much as US$470 million. This would be the company's second attempt to launch in Singapore's IPO market after last year's plan to do so was canceled due to the economic conditions worldwide.

According to the report, the unit of Canadian insurer Manulife Financial Corp. is looking to sell 566 million units at an offer price of US$0.82 to US$0.83 per unit. Manulife US REIT would offer a yield of 6.7 percent in 2016 and 7.2 percent in 2017. Of the 566 million units that the company is planning to offer, 169.54 million units are said to be being taken up by select investors such as Oman Investment Fund and DBS Bank Ltd. Their purchase of the shares come ahead of the IPO and would help the company better market the deal among other investors. WSJ noted that Manulife's IPO in Singapore would give a "rare exposure to the U.S. property market" and "improve sentiment toward the IPO market in Southeast Asia."

The news came after a recent report that Realty Today also covered wherein experts are positive that the capital market is keeping the commercial real estate sector healthy. Although prices and deals concerning commercial properties have slowed down, foreign investments in the U.S. is expected to grow as big institutional investors including pension funds are increasing their real estate portfolios. There is also enough supply to meet the ongoing demand, so the market is believed to be currently balanced.

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