Sabana REIT Compliant Industrial Real Estate Investment Trust

SINGAPORE -(Dow Jones)- Sabana Shari’ah Compliant Industrial Real Estate Investment Trust, or Sabana REIT, Monday filed its prospectus with the central bank for an initial public offering in Singapore, pricing the offer at S$1.05 per unit. In a filing to the Monetary Authority of Singapore, the company said it would raise as much as S$664.4 million in gross proceeds. The public offer of the units closes Wednesday and the shares will begin trading on the Singapore Exchange on Friday, the filing said. When listed, Sabana REIT will be the first Shariah-compliant listing in Singapore and the world’s largest listed Shariah-compliant REIT by total assets.

Sabana REIT

The Singapore-based REIT’s assets are estimated at S$850 million. The company is planning to sell a total of 632.8 million units in the IPO, which includes a 101.8 million placement to cornerstone investors. The cornerstone investors include FIL Investment Management Ltd., a member of Fidelity Investment Managers group of companies; Al Salam Bank-Baharin, Meren Pte. Ltd., a unit of Metro Holdings Ltd.; and Capital Investment Brokerage, a unit of Jordan’s Capital Bank. Singapore has been pushing for the development of Islamic finance in the city state, encouraging companies to offer a range of Shariah-compliant products such as bonds and REITs. Shariah REITs differ from conventional REITs only in the type of assets held by the trust–portfolios only include properties with no connection to activities and products forbidden by Shariah law, such as gambling, alcohol and pork. Sabana REIT’s initial portfolio comprises 15 industrial properties located across Singapore with an aggregate gross floor area of 3.29 million square feet. The properties include office buildings-cum-warehouses, logistics warehouses and chemical warehouses, according to the company’s prospectus said. The company intends to use the proceeds of the IPO to purchase properties and to pay off debt-related costs. Daiwa Capital Markets, HSBC and United Overseas Bank are advising Sabana REIT on the deal, while HSBC is also the sole financial adviser.

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