Retail investors stand to receive higher returns of at least 5.83pc in first year
Institutional investors in the long-awaited government-backed Link Reit may get a lower than expected annualised yield of 5.53 per cent in the first year, according to listing documents.
Investment bankers yesterday launched the roadshow for the sale by the Housing Authority of 151 shopping centres and 79,000 car parking spaces valued at $33.8 billion.
Riding on the reception is not just the final size of the offer, but the outlook for several reit issues in the pipeline, including Cheung Kong's Prosperity Reit and Guangzhou Investment's.
Link Reit, derailed in December last year by a legal challenge, says it will distribute dividends of not less than 19.83 cents per unit in the period from its listing due on November 25 to March 31 next year, irrespective of the profit achieved. This equates to a net profit of not less than $424 million in the period, as forecast by the management.
At a price between $9.70 and $10.30 per unit, the $18.61 billion to $19.76 billion offering has an annualised yield of between 5.53 per cent to 5.88 per cent for this year to March, or 6 per cent to 6.37 per cent in 2007.
Retail investors, who receive a 5 per cent discount, will get higher dividend yields of 5.83 per cent to 6.18 per cent next year and 6.3 per cent to 6.7 per cent in 2007.