17 August 2005
Consistent with its strategy to build new investment opportunities in international markets, Macquarie Bank Limited (Macquarie) today announced it intends to acquire a strategic stake in Prime REIT, a Singapore-based real estate investment trust to be listed on the Singapore Stock Exchange and investing in two of the country's landmark retail properties.
The initiative is being led by Macquarie's Property Group and involves the acquisition of 235.75 million units (equal to 25 per cent) in Prime REIT (subject to a 5 per cent scale back. The purchase price will be up to $S231 million and will depend on the offering price, which is expected to be between $S0.93 and $S0.98 per unit. The transaction will not have a material impact on the Bank's capital position.
Macquarie has also entered into a call option agreement to acquire a 50 per cent indirect interest in the manager and the property manager of the REIT, currently subsidiaries of local fund manager, Pacific Star Holding Pte Limited ("Pacific Star") which is owned jointly by Ergo Trust AG and Investmore Pte Limited, a Singaporean investment holding company. It is Macquarie's intention to exercise this call option after Prime REIT lists.
James Hodgkinson, an Executive Director in Macquarie's Property Group, said that the Prime REIT transaction represents an important milestone in implementing Macquarie Property's strategy to expand and capture new investment opportunities in high-growth markets with quality underlying assets.
"Our investment in Prime REIT reflects the confidence we have in the investment potential of the Singapore property market and the strength of the underlying properties," Mr Hodgkinson said. "This represents a significant opportunity for Macquarie Property to tap future growth of the rapidly expanding Asian REIT market."
Prime REIT's existing assets are Singapore's Ngee Ann City and Wisma Atria shopping and office complexes. These high-end retail malls occupy a prime location in Orchard Road, the heart of Singapore's premier shopping and tourist precinct. The strong brand of both properties has been widely recognised. Ngee Ann City won the Singapore Tourism Board's 'Best Shopping Experience' award for six consecutive years (1999 - 2004). Both centres were awarded 'Superbrand' status for the shopping centre category in the Superbrands Singapore Awards in 2004 and 2005. These prestigious properties are augmented by a weighted average lease term expiry of 4.2 years (from 31 January 2005).
With an initial market capitalisation of approximately $S1 billion ($A800 million), Prime REIT will invest throughout Asia in retail and office properties. Prime REIT's key objectives are to deliver regular and stable distributions and achieve long-term growth in net asset value, delivering a competitive rate of return to investors.
Prime REIT is expected to list on the Singapore Stock Exchange in mid-September 2005. Macquarie's stake in the Prime REIT delivers the opportunity for stable long term income backed by high quality assets.
In Asia, Macquarie Property and its associates are focused on real estate investment banking, property funds management, and development and asset management in Korea, Japan, Hong Kong, China and Singapore. More than $23 billion in property assets are managed under the Macquarie brand, across a portfolio of listed and unlisted property trusts, unlisted development funds and property investment syndicates, globally.
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Macquarie Bank Limited
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Macquarie ProLogis Management Limited
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Macquarie Property Investment Management
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Macquarie Bank Limited ABN 46 008 583 542 ("MBL") is authorised by The Australian Prudential Regulation Authority in the Commonwealth of Australia and The Financial Services Authority in the United Kingdom, to carry out banking business or to accept deposits in those respective jurisdictions. MBL and its related bodies corporate are not otherwise currently authorised to carry out banking business or to accept deposits in any other country. MBL does not carry on banking business in Singapore. MBL does not hold a license under the Banking Act, Chapter 19 of Singapore and therefore is not subject to the supervision of the Monetary Authority of Singapore.