Sunlight Reit raises yield to attract investors
Sunlight Real Estate Investment Trust had raised its yield guidance to more than 6 per cent in a bid to sweeten its US$500 million initial public offering, market sources said.
The trust by Shau Kee Financial Enterprises and Henderson Land Development indicated a yield guidance of about 5.5 per cent to fund managers when it started preliminary marketing for the reit's initial public offering on Monday.
The dividend yield will be 5.2 per cent next year and 5.5 per cent in 2008, according to a forecast by HSBC, one of the deal's bookrunners.
Sources said the bookrunners, which also include Macquarie and Deutsche Bank, set a higher yield guidance of at least 6 per cent yesterday. One source, however, said the yield guidance had not yet been finalised and would not be decided until the reit's roadshow started on Monday.
There was also market speculation that Sunlight might trim its targeted fund-raising size but sources said the trust would try to maintain the original target as the higher yield might help boost demand.
Fund managers said yesterday's dive by Champion Reit might have prompted Sunlight to raise its yield guidance.
Champion, which listed on Wednesday last week, slid 8.57 per cent to $4 yesterday - 21.56 per cent below its offer price of $5.10. At the close yesterday, its yield was pushed to 6.96 per cent from 5.46 per cent at the listing price.
Sunlight will consist of a package of 20 grade-B office and retail properties in districts such as Mongkok, Sheung Wan, Tseung Kwan O, Wan Chai and Tsim Sha Tsui valued at about $9.2 billion.
Sunlight Reit is set to price its units on June 15, with trading due to start on June 21.
