Home > Uncategorized > REIT Eyes Shariah-Compliant Listing in Singapore

REIT Eyes Shariah-Compliant Listing in Singapore

By P.R. VENKAT

SINGAPORE—Sabana Shari’ah Compliant Industrial Real Estate Investment Trust, or Sabana REIT, is planning to raise about 600 million Singapore dollars (US$459 million) in an initial public offering, a person familiar with the situation said Tuesday.

If successful, this would be the first Shariah-compliant listing in Singapore.

The company is planning to list by the end of 2010 on the Singapore Exchange, the person said. Once floated, Sabana REIT is expected to be the largest certified Shariah-compliant REIT in the world, the person added.

Singapore has been pushing the development of Islamic finance in the city-state, encouraging companies to offer a range of Shariah-compliant products such as bonds and other investments, including REITs. Shariah REITs only differ from conventional REITs in the type of assets held by the trust.

The person said that Sabana REIT’s initial portfolio will comprise properties in Singapore that have no connection to activities such as gambling or to products such as alcohol or pork.

Sabana REIT is planning to acquire a portfolio of properties valued at about 850 million Singapore dollars (US$650 million) and the company received a conditional eligibility-to-list letter from the SGX on Friday, the person said. Office buildings with warehouses, logistics warehouses and chemical warehouses may form part of its holdings.

HSBC, United Overseas Bank and Daiwa Capital Markets are advising Sabana on the deal, while HSBC is also the sole financial adviser.

Monday, Singapore’s logistics business Freight Links Express Holdings Ltd. said it plans a S$192.95 million sale and lease-back of five properties to its unit Sabana Investment Partners, which own Sabana REIT.

Freight Links, through its 51% shareholding equity interest in Sabana Investment Partners, said it will participate in Sabana REIT’s IPO.

Write to P.R. Venkat at venkat.pr@dowjones.com

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