Saizen Real Estate Investment Trust (Reit), based entirely on Japanese property assets, has lodged its prospectus to raise as much as $244.4 million

Saizen Real Estate Investment Trust (Reit), based entirely on Japanese property assets, has lodged its prospectus to raise as much as $244.4 million (US$166 million) in Singapore, confirming a Reuters story last month.

A Hong-Kong based private equity group is selling 196.74 million units of Saizen in an initial public offer at between $1.00 and $1.08 per unit, with a further 29.5 million units to be sold if an over-allotment option is exercised.

Saizen Reit’s initial portfolio of 146 residential buildings are located in 12 cities across Japan. It does not own any property in Tokyo and Osaka.

The trust’s sponsor, Japan Regional Assets Manager, said in the prospectus that the regional residential properties generate higher yields than similar properties in Tokyo and Osaka.

The properties are valued at $626.8 million, with 27 per cent of their aggregate income generated from the city of Sapporo.

Saizen Reit expects to add a further 15 properties worth $71.4 million.

The REIT is forecast to pay dividend yields of between 6.09 and 6.51 per cent per unit this year and 5.29-5.65 per cent next year.

Credit Suisse and Morgan Stanley are arranging the deal.

Unlike Singapore Reits, Japanese-listed trusts are not allowed to hold offshore assets.

Other property trusts based on Japanese assets are expected to emerge soon in Singapore, which is Asia Pacific’s third largest Reit market after Australia and Japan.

JPMorgan and Lehman Bros are believed to be helping Tokyo-based Asia Pacific Land Group raise at least $500 million (US$333 million) from the divestment of some of its Japanese retail and office properties via a Singapore-listed Reit, while Japanese real estate funds manager Re-plus is said to have hired Citigroup to arrange a property trust based on office buildings in China. — REUTERS

Source : Business Times - 8 Oct 2007