Quill Capita to raise RM140m via REIT listing

from biz times

QUILL Capita Trust, a property trust with an initial portfolio of four commercial assets in Cyberjaya, yesterday launched an initial public offering (IPO) that will raise about RM140.3 million.

The real estate investment trust (REIT), to be listed on January 8, is backed by Singapore's CapitaLand Group and Malaysia's Quill Group. Both groups will each hold 30 per cent of the trust upon listing.

Quill Capita Trust will distribute 100 per cent of its net earnings in the first three years to 2008, and at least 90 per cent in the subsequent years, Quill Capita Management Sdn Bhd chief executive officer Chan Say Yeong said. Quill Capita Management is the manager of the REIT.

The dividend yield is estimated at 7.14 per cent for the financial year ending December 2007 and 2008, and 7.32 per cent for 2009, based on the indicative retail price of 84 sen per unit.

Retail investors will pay the lower of 84 sen per unit, or 95 per cent of what institutional investors are paying under the IPO. The institutional price will be determined after a book- building exercise.

The four buildings in the portfolio - DHL 1, DHL 2, HSBC and BMW - are worth a combined RM280 million. The assets are all located in Cyberjaya and were designed, built and owned by the Quill Group.

"This REIT is small (by CapitaLand's standard). But it is a good vehicle which will help us to propel our growth in Malaysia," Chan told reporters after launching the listing prospectus in Kuala Lumpur yesterday.

The event was also attended by Tan Sri Dr Ahmad Tajuddin Ali, chairman of Quill Capita Trust, president of CapitaLand group Liew Mun Leong and Quill group's director Datuk Michael Ong.

Chan said both CapitaLand and Quill are committed in growing the trust with a long-term view in place. However, he did not give a clear expansion target, citing regulatory concerns.

Quill Capita Trust will grow by buying assets from the existing portfolio of Quill group and CapitaLand Financial Ltd, or from future vehicles or property funds created by the two groups to develop or incubate commercial properties, Chan said. The trust may also buy from third parties, he added.

Quill Capita Trust is focused on commercial properties here and ruled out stand-alone shopping mall and hotel for future buys.

The initial four buildings, complete with basement carparks, have a total lettable area of 493,113 sq ft and are 100 per cent occupied by multinational corporations on long-term tenancies with options to renew.