PACIFIC STAR PRIME REIT
SINGAPORE Ergo Versicherungsgruppe, Germany's second-largest
insurer, is preparing to raise about 500 million Singapore dollars
by selling shares in a real estate investment trust next month, the
manager of the trust said Wednesday.
"Our listing is anticipated to be around mid-August," said Franklin
Heng, chief executive of Pacific Star Prime REIT Management. The
share sale target is equivalent to $295 million.
Prime REIT, the seventh property trust to sell shares in Singapore
since July 2002, owns about $1.3 billion of retail and office
properties in the city's main shopping district of Orchard Road,
DBS Vickers Securities (Singapore), one of the sale's arrangers,
said in a report to investors.
The trust is promoting high occupancy and stable rental rates in
the Orchard Road retail district to attract investors seeking
low-risk opportunities with steady returns, according to the
report. Property trusts pay dividends from rental income.
DBS Vickers, Deutsche, J.P. Morgan Chase and Macquarie Bank are
managing the sale, Heng said.
Macquarie Bank, Australia's biggest investment bank, has the option
to buy a 50 percent stake in the manager of the trust and the
property manager, Pacific Star Property Management, within six
months from the day the shares are listed, DBS Vickers said.
Macquarie Bank Group manages 12 listed property trusts in four
countries.
The manager of Prime REIT will earn an annual base fee of 0.5
percent of the value of the assets and a maximum performance fee of
0.3 percent, DBS Vickers said.
The trust and property managers are each 50 percent owned by Ergo
Trust, a wholly owned unit of Ergo, which managed assets worth
13.8 billion, or $16.4 billion, at the end of 2004, according to
the report.
Investmore Enterprises, an investment holding company incorporated
in the British Virgin Islands, owns the rest of the managers, the
report said.
Prime REIT is also counting on a recovery in Singapore's office
sector to attract investors to the share offer, said DBS Vickers, a
unit of DBS Group Holdings, Singapore's biggest bank by
assets.
The trust hopes to benefit from the Singapore government's efforts
to upgrade the Orchard Road area and double annual tourist arrivals
to 17 million.
