IGB Commercial REIT’s ROFS undersubscribed by 21%

KUALA LUMPUR (Aug 27): The restricted offer for sale (ROFS) of IGB Commercial Real Estate Investment Trust (REIT) units to IGB Bhd shareholders under the REIT's listing exercise has received lukewarm response.

The principal adviser, Hong Leong Investment Bank Bhd (HLIB), said as at the closing of the restricted offering on Aug 20, which it previously extended to from July 6, the REIT's manager had received valid acceptances for 241.95 million ROFS units and 362.92 million corresponding distribution-in-specie units.

This represents a subscription rate of 78.72% out of the total 307.34 million ROFS units and 461 million corresponding DIS units available for subscription.

In other words, the ROFS is undersubscribed by 21.28%, based on the figures released in the filing with Bursa Malaysia.

Menara IGB is one of the properties owned by the REIT. Photo by Zahid Izzani/The Edge

According to HLIB, the unsubscribed ROFS and the corresponding DIS, which amount to 163.47 million units, will now be placed out to institutional and selected investors, together with the initially set aside 130 million units offered for sale by selling shareholders.

IGB Commercial REIT has set the indicative price for the institutional portion at 83 sen apiece. The Edge reported this morning, citing a term sheet it sighted, that the bookbuilding process for the placement will begin next Monday (Aug 30) and close on Sept 2.

The REIT’s assets include Menara IGB, IGB Annexe, Centrepoint South, Centrepoint North, Boulevard Properties, Gardens South Tower, Gardens North Tower and Southpoint Properties at MidValley City. Meanwhile, its assets in the Golden Triangle comprise Menara Tan & Tan, G Tower and Hampshire Place Office.

No thanks to the Movement Control Order and cautious outlook on office space, the REIT manager had to downsize the unit offering to 898.33 million (including institutional offering) compared with 1.227 billion units previously — comprising 945 million units to IGB shareholders and at least 282 million units to institutional investors.

Its previous restricted offering for IGB shareholders involved the ROFS of up to 378 million units at RM1 apiece on the basis of two units for every five shares held, and the corresponding DIS units of up to 567 million for every two ROFS units subscribed.  

As for the institutional offering of at least 282 million units, it had on July 2 trimmed it to at least 130 million units.

Its tentative listing date had also been postponed to Sept 20 from July 30.

The IPO's joint bookrunners are HLIB, Maybank Investment Bank Bhd and RHB Investment Bank Bhd.

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