New $1b Reit may float by year-end - Century Square, Hougang Mall, Tiong Bahru Plaza and White Sands

A new real estate investment trust owning more than $1 billion worth of assets, including suburban shopping centres - Century Square, Hougang Mall, Tiong Bahru Plaza and White Sands - could be floated here as early as Q4 this year.

Pramerica Real Estate Investors (Asia) chief executive officer Victoria Sharpe told BT that the fund manager is considering spinning off the assets in Asian Retail Mall Fund (ARMF), as one of the options for an exit strategy for investors in the fund.

The assets in ARMF, valued at slightly over $1 billion, include the Central Plaza office block next to Tiong Bahru Plaza mall. Pramerica Asia - formerly known as GRA Singapore - manages the ARMF and its sequel fund ARMF II. ARMF, which has a total equity size of $320 million, is fully invested, and ARMF II, with US$400 million equity size, is nearly 80 per cent invested.

The second fund’s property portfolio includes Liang Court Shopping Centre, which is undergoing a $45 million refurbishment, and a new $450 million mall, Tampines 1, being built next to Tampines MRT Station.

The two funds have some common investors, including Pramerica-linked entities, three big Dutch pension funds and Singapore-listed Guthrie GTS. NTUC FairPrice invested in the first fund but not the second. The second fund also has some new investors.

Pramerica Asia also manages Asia Property Investment Fund (ASPF) with an equity of 655 million euros (S$1.35 billion) which is fully invested. This is a Pan Asian fund with a property portfolio in markets including Japan, China, Singapore, Korea, Hong Kong, India and Thailand. The fund has a half share in the Jurong Point extension development and Centris residential project in Singapore.

Investors in the fund include German insurance companies and pension funds, as well as investors from the Gulf region.

These three funds - ARMF, ARMF II and ASPF - hold eight properties in Singapore, with about 1.7 million sq ft net lettable area, valued at more than $2.4 billion. Singapore is the biggest of the firm’s Asian investment markets. Pramerica Asia is currently raising capital for ASPF II with a target equity size of one billion euros, which it expects to finish raising by the end of this year, Ms Sharpe said.

The follow-on fund will probably target the same Asian countries for property acquisitions, she said.

Pramerica Asia-managed funds generally have gearing of about 60 to 70 per cent.

Source: The Business Times, 24 May 2007