Champion Real Estate Investment Trust, the prime office property spin-off from Great Eagle Holdings, aims to attract investors with an above-average yield of between 4.8 per cent and 5.5 per cent as it hopes to raise as much as US$900 million in next month's float.
Champion Reit, which has only Citibank Plaza in Central that offers 1.49 million square feet of Grade A office space, plans to sell 1.23 billion shares.
Of this issue, 90 per cent will be offered to institutional investors and the rest to the public.
The price range will be announced on May 3 when the reit launches its roadshow.
The initial public offering will be open from May 11 to May 16, followed by the reit's trading debut on May 23. Citigroup, JP Morgan and Merrill Lynch are the joint bookrunners.
Market players consider the proposed yield reasonable as it is above the current Grade A office yield and comparable to Hong Kong's three listed reits but some said the property's valuation appeared to be aggressive.
The average yield for Grade A office buildings in Central is 3.4 per cent, according to Colliers International research director Simon Lo Wing-fai.