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Wednesday, October 29, 2008

YTL ventures into S’pore REIT

PETALING JAYA: YTL Corp Bhd is making inroads in Singapore’s real estate sector with its proposed acquisition of about 26% in Macquarie Prime REIT (MP REIT) and 50% of Prime REIT Management Holdings Pte Ltd from Macquarie Bank Ltd for S$285mil.

Prime REIT is the holding company of Macquarie Pacific Star Prime REIT Management Ltd, the REIT manager of MP REIT, and Macquarie Pacific Star Property Management Pte Ltd, the property manager of MP REIT’s Singapore properties.

Merrill Lynch (S) Pte Ltd is financial advisor to YTL Corp on the proposed acquisitions.

YTL Corp said in a statement yesterday the group would acquire 247,101,000 units in MP REIT at S$0.82 each, which was a 49% discount to MP REIT’s net asset value per unit, a 17% premium over its 30-day volume-weighted average price and a premium of 52% over its last traded price.

The proposed acquisitions will be financed by internally generated funds.

The acquisitions, which would provide a yield of about 9.4%, would allow YTL Corp to control the REIT. MP REIT had a market capitalisation of S$516mil as of Oct 24 and owns over S$2.2bil worth of prime retail and office properties in Singapore, Japan and China.

Its asset portfolio include 74.23% of total strata lots in Wisma Atria and 27.23% of total strata lots in Ngee Ann City.

YTL Corp said upon completion of the transaction, it intended to rename MP REIT, the manager and the property manager companies to Starhill Global REIT, YTL Pacific Star REIT Management Ltd and YTL Pacific Star Property Management Pte Ltd, respectively.

As Starhill Global REIT will be a key vehicle of YTL Corp, the group planned to appoint managing director Tan Sri Francis Yeoh as the REIT manager’s executive chairman.

“Our vision and investment track record will enable us to add value to MP REIT through our sponsorship as we focus on re-branding and growing the REIT through yield accretive acquisitions of prime regional assets,” Yeoh said.

Since its listing on the Singapore Exchange in September 2005, MP REIT has added eight retail properties to its portfolio through the acquisitions of prime assets in Japan and China.

An analyst with a local brokerage said YTL Corp, with its war chest of more than RM10bil, was in a good position to pick up some quality assets at depressed prices following the global financial meltdown.

“With the price at a 49% discount to the net asset value, the proposed acquisition of MP REIT will provide stable earnings and good upside potential. By having a REIT in Singapore, YTL will be well placed to tap the city-state’s expanding real estate sector and promote its Starhill brand in the international market,” she added.

By The Star (by Angie Ng)

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