Singapore's rapidly growing real estate investment trust (REIT) sector continues to dominate the securitization landscape. One of Singapore's biggest property developers K-REIT, the commercial property trust established by Keppel Land, was due to launch its debut commercial mortgage-backed issue as of press time.
Simultaneously, two REITs established by one of Keppel's rivals, CapitaLand, sent out requests for proposals on separate CMBS transactions to refinance a recent joint property acquisition.
K-REIT, due to start trading on the Singapore Stock Exchange on April 28, has acquired Keppel's holdings in four commercial properties worth an estimated $630 million ($393.9 million). The CMBS cross-border issue, arranged by Deutsche Bank, will refinance 97 million ($119.8 million) of that.
Raffles sale
Meanwhile, the two CapitaLand REITS -CapitaCommercial Trust (CCT) and CapitaMall Trust (CMT) - are in the process of completing the purchase of Raffles City, a centrally-located complex comprising an office tower, shopping mall, two hotels and convention centre. The office and retail space is almost 100% occupied.
The sale, which will cost S$2.1 billion, will be 60% funded by CCT, with CMT buying the remaining stake. Both REITs will issue CMBS deals to refinance some part of the acquisition.
Details on the size of each CMBS or timing have not been released. However, given strong appetite for Singaporean CMBS from European investors, it seems probable both will go the cross-border route.
If that is the case, banks with experience of executing Singaporean CMBS added to strong European syndicate desks will be strong candidates, such as ABN Amro, Deutsche Bank and HVB.
With other Singaporean REITs pursuing ambitious expansion plans domestically and abroad in 2006 and 2007, there should be significant related CMBS activity.
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