IGB Commercial REIT will have a market capitalization of RM2.3b on listing
KUALA LUMPUR: IGB Commercial REIT is expected to have a market cap of RM2.30 billion when listed on the Bursa Malaysia Securities Bhd market.
It had launched its prospectus on Thursday where it will be Malaysia’s sixth-largest REIT and the largest free-standing office REIT by market capitalization, net leasable area (NLA) and appraised value.
IGB Commercial REIT has stated that the market capitalization of RM2.30bil is based on the Restricted Offer To Sell (ROFS) price of RM1 per ROFS unit. It is also expected to have a float of at least RM607.80mil based on the ROFS price.
The investment objective of IGB Commercial REIT is to provide unitholders with regular and stable distributions, a long-term sustainable price per unit, as well as distributable income and capital growth, while maintaining a structure appropriate capital.
The IGB Commercial REIT offer scheme involves:
1) Restricted offer of a maximum of 945,000,132 units in IGB Commercial REIT comprising:
i) Restricted offer to sell a maximum of 378 million units (ROFS units) on a non-waiver and non-negotiable basis to authorized shareholders of IGB Bhd on the basis of 2 ROFS units for five ordinary shares of IGB Bhd held on Jun 4, 2021 at a price of RM1 per ROFS unit.
ii) Distribution in kind of up to 567 million units (DIS units) to be distributed only to beneficiaries who have subscribed to their rights to ROFS units at the rate of three DIS units for two subscribed ROFS units.
2. Institutional offer of at least 282 million units by certain IGB Bhd shareholders and offer to sell all unsubscribed ROFS units with the corresponding DIS units, to institutional investors and to selected investors at the institutional price being the price per unit of supply to be paid by investors which will be determined by way of bookbuilding.
“We believe that the large size and the corresponding float can enhance the visibility of IGB Commercial REIT among the local and international investment community,” said Wong Khim Chon, deputy general manager of IGB REIT Management Sdn Bhd, the company management of IGB. Commercial REIT.
In elaborating on the goal, IGB REIT Management Sdn Bhd intends to achieve the goal through a proactive asset management and improvement strategy and a strategy of investing and growing potentially profitable acquisitions and to a prudent capital and risk management strategy.
He also stated that the sponsor (IGB Bhd) and the manager have extensive experience in managing real estate assets and a proven track record in managing and growing listed real estate funds namely IGB REIT.
The promoter will own a substantial stake of at least 50% in IGB Commercial REIT, immediately after the completion of the offer, making it the largest unitholder.
Thus, the promoter’s interest will then be aligned with that of the other unitholders.
“We believe that IGB Commercial REIT will be able to leverage IGB Bhd’s track record in developing and operating commercial properties in addition to its financial strength, market reach and network of contacts to continue the growth of IGB Commercial REIT, âsaid Wong.
IGB Bhd and its group of companies have over 40 years of experience in real estate development. Listed on Bursa Securities since May 8, 2002, IGB Bhd has a market capitalization of approximately RM 2.54 billion as of April 20, 2021.
In its fiscal year 2020, IGB Group generated revenue of approximately RM 1.01 billion with a total asset base of RM 8.58 billion.