Business | Property
Singapore's clout as an Asian real estate financing centre on the rise
Hong Kong Ascendas, the property management company, will soon announce the pricing for the first listing in Singapore of a fund investing in Indian property, underlining Singapore's growing clout as a centre for Asian real estate financing.
- By Raphael Minder, Financial Times
- Published: 22:52 July 26, 2007
Hong Kong Ascendas, the property management company, will soon announce the pricing for the first listing in Singapore of a fund investing in Indian property, underlining Singapore's growing clout as a centre for Asian real estate financing.
Bankers indicated that shares in the property investment trust, which is expected to raise $550 million from investors, has been many times subscribed.
A successful launch is seen as significant because booming construction activity in India and elsewhere in Asia is driving real estate companies to raise more capital at a time of heightened competition between financial centres including Singapore, Hong Kong and Tokyo.
Attractive destination
A flow of listings of Indian real estate investment trusts (Reits) will help Singapore develop as the port of call for developers across the region, say observers.
Peter Mitchell, chief executive of the Asian Public Real Estate Association, which represents the region's traded property companies, says: "At this stage, Singapore is the logical destination. The Indians are talking about bringing in their own Reit-style legislation but it is a long time coming."
Bankers also highlight the favourable legislative framework around Singapore's five-year-old Reit market. Issuance is expected to rise to almost S$6 billion ($3.96 billion) this year, from S$4.4 billion in 2006.
Mark Chu, head of Asian property at Merrill Lynch, which recently managed the first Singapore Reit listing containing Indonesian assets, says: "Singapore has a very flexible regulatory environment, which is what this growing Asian market needs."
Anthony Ryan, head of Asian real estate investment banking at JPMorgan, which is managing the Ascendas listing together with Citigroup and DBS, believes Singapore is "really marching ahead" of its rivals, with the strongest international pipeline of offerings.
So far, the drive to offshore Reits has been led by Singapore state-owned property companies CapitaLand, the country's biggest property developer, and Ascendas, a subsidiary of industrial park developer JTC.
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