Singapore’s City Developments halts UK REIT IPO plans
Singaporean real estate investor City Developments has halted plans to list its UK assets in a REIT on its domestic stock exchange.
In its third-quarter operational update, covering the three months to 30 September, the company said that “unprecedented interest rate hikes in 2022 have severely impacted the initial public offerings of REITs in Singapore”.
It added: “Amid this challenging market, the group is placing a temporary pause on its IPO aspirations for its UK commercial properties until the market stabilises. The short-term market uncertainties present opportunities for the group to make strategic acquisitions that will complement its fund management strategy.”
Singaporean real estate investor City Developments has halted plans to list its UK assets in a REIT on its domestic stock exchange.
In its third-quarter operational update, covering the three months to 30 September, the company said that “unprecedented interest rate hikes in 2022 have severely impacted the initial public offerings of REITs in Singapore”.
It added: “Amid this challenging market, the group is placing a temporary pause on its IPO aspirations for its UK commercial properties until the market stabilises. The short-term market uncertainties present opportunities for the group to make strategic acquisitions that will complement its fund management strategy.”
City Developments first mooted a UK-focused REIT in 2020, since which time it has grown its UK holdings substantially.
In the Q3 report, the company nonetheless highlighted a robust performance from its UK portfolio. It said demand for Grade A, energy-efficient office space meant London’s leasing market had proved “relatively stable”.
City Developments owns 125 Old Broad Street and Aldgate House, which it said are “benefitting from such resilience”. “Existing occupiers are renewing their leases, increasing their footprint or in active discussions around a longer-term lease arrangement,” the company added.
In the living sector, where the company has just bought Apache Capital’s Cumberland Place PBSA scheme in Southampton, City Developments said limited supply and mortgage affordability issues had underpinned a rise in rental demand for PRS accommodation.
“This augurs well for the Junction, the group’s 665-unit PRS development in Leeds, which has begun preleasing as its phased completion is on track to commence in Q4 2022,” the company said.
Its London hotels, which include The Biltmore Mayfair, posted a 291.2% jump in revenue per available room over the first nine months of the year, which the company pinned in part on the “unexpected spike in demand” from visitors traveling to London for the Queen’s funeral.
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