Dasin Retail Trust's Shiqi Metro Mall, which is expected to be inducted by mid-2017. (Photo: Dasin Retail Trust)Dasin Retail Trust's Shiqi Metro Mall, which was inducted in mid-2017. (Photo: Dasin Retail Trust)

China-focused Dasin Retail Trust has launched an initial public offering (IPO) for 151,768,900 units to be listed on the Singapore Exchange, and seeks to raise some SGD121 million (USD85 million) from the exercise.

The trust, which has a mandate to own or develop income-producing real estate assets in the Greater China region, including Hong Kong and Macau, lodged its final prospectus with the Monetary Authority of Singapore (MAS) on 13 January.

Dasin Retail Trust’s initial portfolio consists of three retail properties, Xiaolan Metro Mall, Ocean Metro Mall, and Dasin E-Colour, all of which are located located in Zhongshan City, China.

The portfolio features total aggregate gross floor area of approximately 314,884.9 square metres, and an aggregate value of approximately RMB4.6 billion (SG944.7 million).

Dasin Retail Trust has also signed a framework agreement to acquire Shiqi Metro Mall by 30 June 2017, which will increase its aggregate gross floor area to 434,567 square metres, and aggregate value to RMB7.4 billion (SGD1.5 billion).

As of 30 June 2016, the four properties have a weighted average occupancy rate of 99.0%, and a weighted average lease expiry (WALE) of 7.4 years.

The IPO will comprise of a placement tranche of 149,768,900 units for qualified investors, and a retail offering of 2,000,000 units for the public in Singapore.

Dasin Retail Trust has also secured commitments of SGD25 million from two cornerstone investors, China Orient Asset Management, and Haitong International Investment Fund, both of which have agreed to subscribe for an aggregate of 31,250,000 units at the offering price.

The trust has committed to distribute 100% of its distributable income for its 2017 and 2018 reporting periods, and at least 90% from 2019 onwards.

Based on the IPO of SGD0.80, Dasin Retail Trust projects a distribution yield of 8.5%, and 9.0% for the reporting periods of 2017, and 2018 respectively.

The public offer closes at 12.00 p.m. on Wednesday, 18 January 2017, while trading of the units is expected to commence at 2.00 p.m. on Friday, 20 January 2017.

DBS has been appointed as the sole financial advisor of the offering, and will work with Bank of China, and Haitong International Securities as joint bookrunners, and underwriters of the IPO.

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.