Shareholders of newspaper publisher Singapore Press Holdings (SPH) have overwhelmingly voted in favor of the motion to spin off part of the company's property holdings into a REIT. The approval was obtained in an Extraordinary General Meeting (EGM) of the Company held at 9.30 am today.

Paragon is a fully tenanted shopping mall located along Orchard Road that will be injected into the SPH REIT.

In the motion to approve the proposed establishment of SPH REIT and the injection of the Paragon shopping mall and Clementi Mall into the SPH REIT, 254,127,560 votes or 99.79 percent were cast in favor while only 533,290 votes or 0.21 percent were cast against.

On top of that there was another motion approved - the payment of a special cash dividend of S$0.18 per share as a reward for current shareholders once the SPH REIT is listed. The motion was approved with 99.94 percent in favor.

In an opening address made during the EGM, SPH Chairman Dr. Lee Boon Yang has indicated that upon the listing of the impending REIT, SPH will remain the single largest unit holder with a stake of approximately 70 percent. "This will allow SPH shareholders to continue to benefit from SPH’s majority ownership of these quality properties through new revenue streams", said Dr. Lee.

Total consideration for the 2 properties to be injected into the SPH REIT stands at S$3,070.5 million. This breaks down to S$2,500 million for 99-year leasehold interest in Paragon Mall and S$570.5 million for 99-year leasehold interest in Clementi Mall. Other properties that may be injected in the future include the upcoming Seletar Mall.

However concerns over the timing of the REIT lingers. There are various speculations as to what the offer price will be for the IPO. Singapore REITs have taken a tumble lately, virtually wiping out all gains made for 2013 since it peaked at a 52-week high last May. Optimism for Singapore REITs have also taken a beating lately with some analysts holding the opinion that yields have become too compressed to remain attractive. Bearing these circumstances, there are some investors who are hoping that the offer price for the SPH IPO would skew towards the lower or middle ranges.

But should commitment from cornerstone investors remain strong, SPH is likely to go for the upper price range in the footsteps of a previous REIT IPO, Mapletree Greater China Commercial Trust. That IPO went for the top of its price range of S$0.93. The SPH REIT is expected to list this July.