By P.R. Venkat
SINGAPORE--Manulife US Real Estate Management Pte. Ltd. has
delayed its US$465 million plan for an initial public offering in
Singapore due to volatile global market conditions, people with
knowledge of the deal said Monday.
Manulife US Real Estate Management, a unit of Canadian insurer
Manulife Financial Corp., started taking orders from investors last
week, but investor demand for the real-estate investment trust's
units didn't meet the company's expectations, these people
said.
A representative for the company didn't immediately respond to a
request for comment.
Manulife US Real Estate Management is the latest firm to fall
victim to weak investor sentiment toward new offerings. The
sentiment is reflected in Asia's equities markets, which have
turned volatile in the past week due to uncertainty about economic
growth in China and the debt crisis in Greece. Expectations of a
possible rise in interest rates in the U.S. this year have also
been prompting investors to move out of some Asian markets.
Investors have been dumping shares in markets across the globe,
with many in Asia falling victim. China's Shanghai stock market
index fell 9% last week. Singapore's main index rose, but has been
volatile this year and has fallen 0.7% since January.
Other firms have also suffered. In May, an Indonesian
telecom-tower operator partly owned by Carlyle Group postponed a
planned share sale that could have raised up to $300 million,
because of weak market conditions. Separately in March, two firms
in Malaysia--a helicopter firm partially owned by KKR and the
automotive arm of Malaysia's Sime Darby Bhd., the world's largest
listed palm-oil producer--also pushed their IPOs to next year
citing similar reasons, people with knowledge of these two deals
said earlier.
Manulife US Real Estate lodged its preliminary IPO prospectus
with the Monetary Authority of Singapore last week, which showed
that the company was seeking to raise 629 million Singapore dollars
in gross proceeds. The IPO, if successful, would have been the
biggest offering in Singapore so far this year and would have
provided a rare exposure to the U.S. property market. The company
was planning to sell the units at 82 Singapore cents (61 U.S.
cents) a unit and had committed to pay a 6.3% yield for 2016, the
prospectus showed.
It had also secured six cornerstone investors, who had agreed to
take up units of the Singapore REIT ahead of the IPO. These
included sovereign-wealth fund Oman Investment Fund, Nikko Asset
Management and Malaysia's Fortress Capital Asset Management.
Cornerstone investors generally buy shares ahead of an IPO and
having such investors helps bankers and the company market the deal
to other institutional and retail investors.
Singapore is an attractive destination for trust listings and is
home to nearly 59 real-estate investment and other trusts, with a
combined market capitalization of close to S$100 billion. Investors
are drawn to their yields, which at about 6% or 7% a year exceed
the 0.25% offered on 12-month Singapore-dollar deposits. Although
specific figures weren't immediately available, only a few U.S.
companies have listed in the region, the most recent being luggage
maker Samsonite International SA's US$1.3 billion IPO in Hong Kong
in 2011, according to Dealogic.
Singapore's IPO market has been weak this year amid greater
interest from investors in soaring stocks in mainland China and
Hong Kong. Companies have raised US$33 million through IPOs in
Singapore this year, compared with US$619 million a year earlier,
according to Dealogic.
Write to P.R. Venkat at venkat.pr@wsj.com
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