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Mapletree Commercial Trust: Strong demand.

Wednesday, April 13, 2011

I have been asked by many people if I would be interested in the IPO of Mapletree Commercial Trust.

While I am a regular shopper at VivoCity, I am not enthusiastic about the IPO of this Trust. Why? The distribution yield of 5.5 to 5.9% seems a bit low. This is based on the price range of $0.84 to $0.91 per unit.



It has just been reported that the initial public offering has already been five times covered and the IPO is likely to be priced between the midpoint and top of the price range of $0.84 to $0.91 a unit.

It seems to me that there is still a lot of liquidity out there searching for better returns. Could we see a spillover effect to other S-REITs since there would be a lot of excess liquidity as this IPO is expected to be many times oversubscribed? Why not?


4 comments:

WK said...

IPO over already? how cum...

AK71 said...

Hi WK,

Nope, not over yet. They have yet to fix the IPO price. They are just talking about the high level of interest at the moment. :)

Anonymous said...

Price .88. Is it good buy ?

Cache also this price. But better payout. Maybe due to different trade. Will it be 40 time oversubscibe as the industry ?

TN

AK71 said...

Hi TN,

With a distribution yield of only 5+%, I am not too keen. Of course, whether it would be heavily oversubscribed or not, I do not know. ;)

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