Rare HK Reit IPO analysed

Author: Ashley Lee | Published: 7 Aug 2013
  • New Century Real Estate Investment Trust’s (Reit) initial public offering (IPO) was the first Reit IPO in Hong Kong since the 2011 listing of Hua Xian Reit;
  • It was also the first Reit to include China-based hotel assets. It therefore required extra investor protections such as an irrevocable bank guarantee;
  • The structure has more successful in Singapore than Hong Kong, where its hampered by investor demand and regulatory hurdles - Reits listed in Hong Kong are vetted by the securities regulator, the Securities and Futures Exchange (SFC), while most IPOs are regulated by the Hong Kong Exchange;
  • It remains to be seen whether the Hong Kong Reit market will take off. Business trusts are an alternative, but business trust IPOs have not fared well either in the city-state.

New Century Reit’s IPO was a rare example of a Reit listing on the Hong Kong Stock Exchange (HKSE).

Singapore has...