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Business Times
02-06-2025
- Business
- Business Times
BT Mark to Market: From public to private - Reit delistings in Singapore
Reits have been in the news lately from better than expected results to the keenly followed delisting of Paragon Reit. But does the retail reits' delisting signal a trend? In the latest episode of the investment podcast Mark to Market from The Business Times, host Ben Paul muses on this question. Delisting a new trend? Companies like Paragon Reit and Frasers Hospitality Trust (FHT) have announced plans to delist, sparking conversations about the future of the Reit market. Paul breaks down the various factors influencing these decisions, from macroeconomic trends to structural challenges within the real estate sector. He explains that higher interest rates, increased debt costs, and the strong Singapore dollar are contributing to these Reits' struggles to maintain their value and cash distributions. For investors, understanding these dynamics is crucial. Why are Reits popular A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Reits have delivered consistent cash distributions and the tangible nature of their investments, such as shopping malls and hotels have been at the core of their enduring popularity to investors. However as the episode reveals, the need for significant property reinvestment and asset enhancement initiatives (AEIs) often goes overlooked. Paragon Reit's plan for a major AEI at Paragon on Orchard Road, for example, underscores the hidden challenges in maintaining and increasing property value in a competitive market. Underwhelming historical performance Paul covers historical performance data, showing that hospitality trusts have struggled, with average returns significantly underperforming compared to other sectors. This context is vital for investors when considering the long-term health and viability of their holdings in Reits. Another compelling reason to tune into this episode is Paul's analysis of the potential future of the Singapore Reit market. He wonders whether the trend of delisting will continue or if we'll see a resurgence of new, more resilient Reits entering the market. Compensation and the minority investor This episode dives into the delicate balance between the interests of Reit managers and the minority investors. Paul questions whether the compensation for minority investors in delisting scenarios is fair, citing past instances and current market conditions. This analysis would be helpful to investors faced with the question of accepting an offer or holding out for potentially better deals. Listen now for Ben Paul's expertise and the detailed examination of various Reits' performance, strategic decisions, and market trends to help you navigate this complex investment landscape. Mark to Market is a podcast of BT Correspondents. Look out for the next episode featuring wealth editor, Genevieve Cua. And if you have any thoughts or questions, feel free to reach out to us at btpodcasts@ Written and hosted by: Ben Paul (benpaul@ Edited by: Howie Lim & Claressa Monteiro Produced by: Ben Paul, Howie Lim & Chai Pei Chieh A podcast by BT Podcasts, The Business Times, SPH Media --- Follow BT Correspondents: Channel: Amazon: Apple Podcasts: Spotify: YouTube Music: Website: Do note: This podcast is meant to provide general information only. SPH Media accepts no liability for loss arising from any reliance on the podcast or use of third party's products and services. Please consult professional advisors for independent advice. --- Discover more BT podcast series: BT Money Hacks: BT Podcasts: BT Market Focus: BT Branded Podcasts: BT Lens On:
Straits Times
22-04-2025
- Business
- Straits Times
Paragon Reit unit holders give nod to privatisation offer
Paragon Reit unit holders will receive the scheme consideration of $0.98 a share in cash on or around June 4. PHOTO: ST FILE SINGAPORE - Unit holders of Paragon Real Estate Investment Trust (Reit) on April 22 approved the scheme resolution proposed by Cuscaden Peak's Times Properties to take the trust private. Its delisting is expected on June 6, subject to regulatory approval. During the scheme meeting, 1,000 unit holders, or around 82.8 per cent of those present and voting, agreed to the privatisation offer. This represented about 97.6 per cent of units, well above the 50 per cent required of total voting minority shareholders, as well as the required 75 per cent in value of units. The scheme resolution was also contingent on the approval of amendments made to the Paragon trust deed. These amendments, which were also voted on during an extraordinary general meeting held the same day, drew 98.8 per cent of support, surpassing the 75 per cent required to push through with it. Cuscaden Peak and its subsidiaries, which own 61.5 per cent of the Reit's units, abstained from voting at the meeting. The last day of trading for the counter is expected to be on or around May 14, followed by its record date on May 23 at 5pm. Paragon Reit unit holders will receive the scheme consideration of $0.98 a share in cash on or around June 4. Independent financial adviser (IFA) PrimePartners previously described the privatisation offer of $0.98 per unit as fair and reasonable, and noted that it represented a slight premium of 4.4 per cent over the Reit's net asset value (NAV) per unit, and a premium of 7.1 per cent over its adjusted NAV per unit. The IFA said the scheme consideration also represented premiums of more than 10 per cent over the units' volume-weighted average prices spanning various look-back periods of up to two years. Cuscaden Peak had made an offer to privatise the trust in February, noting that it had the lowest free floats among its retail Singapore Reit (S-Reit) peers, and had historically experienced low trading liquidity. Total assets have grown 1.3 times since the Reit's creation as SPH Reit at its initial public offering in 2013, compared to the average of 2.9 times for other retail S-Reits, Cuscaden added. Its cash offer of $0.98 per unit values the Reit at $2.8 billion. Still, the manager noted in a bourse filing on April 17 that it had tried to address these issues. For instance, it undertook an equity issuance of $164.5 million in December 2019, along with the acquisition of a 50 per cent interest in an Australian shopping centre, which resulted in an increase of its free float to about 38.5 per cent. 'Recent market conditions, such as the Covid-19 pandemic and the unavailability of assets with accretive returns limited Paragon Reit's acquisition of quality assets, which may have resulted in the limited increase (in its free float),' said the manager. The presence of 'many long-term unit holders ' could be another factor, given that the Reit has been consistently paying annual distributions of over $0.05 since its listing, save for 2020, when the Reit was affected by the pandemic, it added. The scheme would therefore allow unit holders 'to realise their investment in cash at an attractive valuation with no trading costs', and enable them 'to immediately reinvest proceeds into other opportunities', said Cuscaden and Paragon Reit. THE BUSINESS TIMES Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
22-04-2025
- Business
- Business Times
Paragon Reit unitholders give nod to privatisation offer
[SINGAPORE] Unitholders of Paragon Real Estate Investment Trust (Reit) approved the scheme resolution proposed by Cuscaden Peak's Times Properties to take the trust private. Its delisting is expected on Jun 6, subject to regulatory approval. During the scheme meeting on Tuesday (Apr 22), 1,000 unitholders or around 82.8 per cent of those present and voting, agreed to the privatisation offer. This represented about 97.6 per cent of units, well above the 50 per cent required of total voting minority shareholders, as well as the required 75 per cent in value of units. The scheme resolution was also contingent on the approval of amendments made to the Paragon trust deed. These amendments, which were also voted on during an extraordinary general meeting held the same day, drew 98.8 per cent of support, surpassing the 75 per cent required to push through with it. Cuscaden Peak and its subsidiaries, which own 61.5 per cent of the Reit's units, abstained from voting at the meeting. The last day of trading for the counter is expected to be on or around May 14, followed by its record date on May 23 at 5pm. Paragon Reit unitholders will receive the scheme consideration of S$0.98 a share in cash on or around Jun 4. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Independent financial advisor (IFA) PrimePartners previously described the privatisation offer of S$0.98 per unit as fair and reasonable, and noted that it represented a slight premium of 4.4 per cent over the Reit's net asset value (NAV) per unit, and a premium of 7.1 per cent over its adjusted NAV per unit. The IFA said the scheme consideration also represented premiums of more than 10 per cent over the units' volume-weighted average prices spanning various look-back periods of up to two years. Cuscaden Peak had made an offer to privatise the trust in February, noting that it had the lowest free floats among its retail Singapore Reit (R-Reit) peers, and had historically experienced low trading liquidity. Total assets have grown 1.3 times since the Reit's creation as SPH Reit at its initial public offering in 2013, compared to the average of 2.9 times for other retail S-Reits, Cuscaden added. Its cash offer of S$0.98 per unit values the Reit at S$2.8 billion. Still, the manager noted in a bourse filing on Apr 17 that it had tried to address these issues. For instance, it undertook an equity issuance of S$164.5 million in December 2019, along with the acquisition of a 50 per cent interest in an Australian shopping centre, which resulted in an increase of its free float to about 38.5 per cent. 'Recent market conditions, such as the Covid-19 pandemic and the unavailability of assets with accretive returns limited Paragon Reit's acquisition of quality assets, which may have resulted in the limited increase (in its free float),' said the manager. The presence of 'many long-term unitholders' could be another factor, given that the Reit has been consistently paying annual distributions of over S$0.05 since its listing, save for 2020, when the Reit was affected by the pandemic, it added. The scheme would therefore allow unitholders 'to realise their investment in cash at an attractive valuation with no trading costs', and enable them 'to immediately reinvest proceeds into other opportunities', said Cuscaden and Paragon Reit.
