Government-linked newspaper publisher Singapore Press Holdings (SGX:T39) has announced that it is currently exploring the establishment of a Real Estate Investment Trust (REIT) that will be listed on the Singapore Exchange (SGX)(SGX:S68). This announcement echoes a similar revelation made by SPH's Chairman Lee Boon Yang last at the company's annual general meeting last November.

SPH REIT Paragon
Amongst the properties currently held by SPH include The Paragon, a busy upmarket shopping mall located along Orchard Road, Singapore.

However there is no indication from the company as to when the REIT is expected to list. In a statement made on the website of SGX Sunday evening, SPH gave no further details besides announcing its intention to establish a REIT.

"The properties forming the portfolio of the REIT and the terms at which the properties will be injected into the REIT are currently still under review", the company said in its statement. "The establishment of the REIT and the listing of the REIT on the SGX-ST will be subject to, among other things, market conditions, the relevant regulatory and other approvals being obtained and the execution of definitive agreements by the relevant parties."

Properties currently under the SPH belt include suburban shopping center Clementi Mall and the upcoming Seletar Mall due to be completed in 2014. But the crown jewel of its property stable is undoubtedly The Paragon, an upmarket mall in the heart of Orchard Road that caters to tourists and big spenders. The Paragon currently enjoys a hundred per cent occupancy and boasts of prime tenants such as Prada, Gucci and Calvin Klein.

News of the impending REIT propelled shares of SPH to close at its highest level in nearly 5 years. The stock went as high as S$4.33 during the day on a wave of anticipation before closing the day at S$4.31, a jump of 3.36 per cent from its previous close. Investors are hopeful that that current shareholders of SPH will be given favorable treatment when the REIT is offered to the public.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.