PARKWAY Life Real Estate Investment Trust (Parkway Life Reit),

PARKWAY Life Real Estate Investment Trust (Parkway Life Reit), which launched its initial share offering yesterday, hopes to double its asset portfolio size in two years’ time, the Reit’s manager told BT yesterday.

Right now, the Reit’s portfolio comprises three private hospitals and medical offices in Singapore worth $774.6 million in total.

Justine Wingrove, chief executive of the Reit’s manager, aims to double the portfolio size to about $1.6 billion by end-2009.

A new acquisition could be expected in the next six months, Ms Wingrove said.

‘We have four key markets that we are focusing on - Singapore, Malaysia, India and China,’ she said. ‘There are more immediate opportunities in Singapore, but we are also looking at opportunities elsewhere.’

The trust, she said, can easily draw from sponsor Parkway Holdings’ asset base. Parkway, which is Asia’s largest listed healthcare operator, has some 17 hospitals and medical centres across Asia under its umbrella, including the three being divested into the Reit.

Also, the trust is looking to buy from third-party vendors, Ms Wingrove said.

For the initial share offer, the trust is offering 288.9 million units at $1.28 apiece - raising about $369.8 million.

Some 253.6 million units will be placed out to institutional and other investors, of which 14.6 million units are reserved for subscription by the directors, management, employees and business associates of Parkway Holdings.

Another 5.9 million units are being offered to the public. In addition, 29.4 million units will be allocated to the Singapore registered shareholders of Parkway Holdings on the basis of one unit of the Reit for every 20 shares in Parkway.

There is also an over-allotment option for up to another 43.3 million units.

Assuming the option is exercised, Parkway will hold some 30.1 per cent of the Reit, while the free float will account for another 55.9 per cent.

The rest of the trust (14.0 per cent) will be held by ‘cornerstone investor’ TPG Capital, which also holds a substantial stake in Parkway.

The trust forecasts an annualised yield of 4.7 per cent for the 2007 financial year. This is expected to increase to 4.9 per cent in 2008 and 5.0 per cent in 2009.

Ms Wingrove said that despite the recent downturn in market sentiment, the Reit has seen strong demand from institutional investors. The placement tranche is about 13 to 14 times oversubscribed, she said.

Parkway shares closed four cents up at $3.72 yesterday.

Source : Business Times - 8 Aug 2007