CAPITALAND Retail Limited, owned by Southeast Asia’s largest developer CapitaLand, has won approval from the Singapore Exchange to list its shares on the stock market, its parent company said on Monday.
CapitaLand Retail Limited will be renamed CapitaMalls Asia Limited.
‘In conjunction with the proposed listing of CapitaMalls Asia, CapitaLand is considering a public offering of part of its shareholding interest in CapitaMalls Asia,’ CapitaLand said in a statement.
PROPERTY developer CapitaLand unveiled ambitious plans on Monday to list its retail arm, reflecting its confidence in Asia’s growing shopping mall business.
The firm said at a briefing it has won approval from the Singapore Exchange (SGX) to list the shares of CapitaLand Retail, which will now be renamed CapitalMalls Asia (CMA). The decision to hive off its retail arm will allow the group to accelerate the growth of its integrated shopping mall business, which will have direct access to capital markets to expand, said chief executive officer Liew Mun Leong.
CapitaLand will likely list 20 to 30 per cent of CMA in an initial public offering (IPO) that will raise at least US$1 billion (S$1.4 billion). This could take place by year-end or early next year, but the firm is in no hurry, said chief financial officer Olivier Lim, who added that it is still too early to discuss a valuation of CMA.
The company will seek shareholder approval for the proposal at the end of the month.
CMA’s IPO will be Singapore’s biggest IPO in recent times, and also signals a recovery in the IPO market which has languished since the global financial crisis last year. Its listing would be the biggest in Singapore since Thai Beverage raised S$1.37 billion in May 2006.
When listed, CMA will be one of Asia’s few ‘pure play’ shopping mall businesses by property value and geography. It will manage and have stakes in a portfolio of malls across Asia with a total property value of S$20.3 billion as at June 30.
CAPITALAND Retail’s first-half earnings before interest and tax were S$245 million, and its net asset value as of end-June was S$5.3 billion.
CapitaLand’s retail business includes managing property funds such as CapitaMall Trust and CapitaRetail China Trust.
CapitaLand halted trading in both units plus the parent company’s stock early on Monday. CapitaLand shares have gained 42 per cent this year, slightly underperforming the broader Singapore index’s 48 per cent rise.
The company said it may also consider recommending a special dividend to its shareholders after listing its unit. It will seek shareholders approval for the plan later in October.
Listings in Singapore have dried up with just one in the April-June quarter, versus nine a year earlier, though Singapore Exchange said in August it expected more IPO demand. The shopping mall offering would be the biggest in Singapore since Thai Beverage raised S$1.37 billion in May 2006.
‘With the quality of its assets I don’t think the company should have any issue raising S$1.5 billion from this transaction,’ said an analyst who declined to be identified.
Affluent Singapore is opening several new shopping malls this year, including CapitaLand’s ION Orchard, as new luxury brands expand to tap a country with the world’s highest density of millionaires.
Property consultancy DTZ said in a report on Monday that rents in Singapore’s main shopping boulevard Orchard Road are 7-14 per cent below the peak levels seen about a year ago, versus Singapore office rents that are down more than 50 per cent.
Asia’s retailers have held up relatively well in the financial crisis compared to US and European peers. Wal-Mart and Sweden’s Hennes & Mauritz are both opening new stores in China.
JPMorgan is sole financial adviser for the planned listing and is joint issue manager with DBS.
Source : Straits Times – 5 Oct 2009
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