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21 November 2005
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Link REIT IPO Secures HK$100 Billion
In Retail Orders |
The Hong Kong government's Link Real Estate Investment Trust (REIT)
initial public offering had secured HK$110 billion (US$14.2 billion)
in orders from retail investors when the world's largest REIT offering
closed last week, according to local media reports.
The amount of orders generated by the public offering means that
its retail tranche was about 19.5 times covered, although this is
substantially less than the HK$280 billion placed in the aborted
sale last year, market sources revealed in a report by the Hong
Kong Standard.
Last year's offer, which was put on hold after a court challenge
was brought by a Hong Kong Housing Authority tenant, was 130 times
oversubscribed. Demand at the time was such that 50 percent of the
offer was opened to retail investors rather than the original 10
percent.
In a bid to attract retail investors, the government has offered
a 5% discount to the offering price, expected to be in the range
of HK$9.70 to HK$10.30 per unit. Also, this time around, 30% of
the offering will be available to individual investors.
The institutional tranche of the Link REIT offering saw orders
of at least HK$167 billion and was at least twelve times oversubscribed.
Units are being sold at a price of between HK$9.70 and HK$10.80
and offer a yield of between 5.5 percent and 5.88 percent in the
year ending March 2006, based on a planned dividend of HK$0.198.
The Link REIT will make its debut on the Hong Kong Stock Exchange
on November 25.
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