Centuria pulls plug on $215m float of property trust
After a book-build process, which was supported by private investors, the underwriters fell short with institutional investors. It is believed property developer Terry Agnew was asked to take a higher stake than his original 19.9 per cent.
The proposed float owned one asset, the Northpoint Tower in North Sydney, which it bought from Mr Agnew to seed the trust.
Centuria chief executive Nick Collishaw said while he was disappointed, there were plans to revisit the float in early calendar 2014, "when we hope market conditions have improved".
"Whilst there was good support for the trust's strategy and management, Centuria is disappointed the offering did not receive sufficient demand to complete the IPO, notwithstanding the strong lead from domestic and Asian retail investors," Mr Collishaw said.
"[Centuria] retains its aspiration to create a listed real estate funds management platform."
The cancellation followed the recent shelving of the $367 million Pacific Retail REIT, which planned to buy four suburban malls from CFS Retail.
Advisers Moelis & Company also blamed the sharemarket and uncertainty in the lead-up to the federal election on the decision not to proceed.
Fund managers said the two floats offered solid yields but the assets were small and market conditions remained uncertain for retail and smaller office trusts. Investors are now keenly awaiting the details of the planned $200 million float by APN Property.
Frequently Asked Questions about this Article…
Centuria cancelled the $215.3 million float after a book-build that attracted strong private and retail interest but left the underwriters short of support from institutional investors. The decision was also influenced by general sharemarket uncertainty and concerns ahead of the federal election, which advisers cited as factors in not proceeding.
The proposed trust would have owned a single asset: the Northpoint Tower in North Sydney, which Centuria bought from property developer Terry Agnew to seed the trust.
Terry Agnew was the seller of the Northpoint Tower used to seed the trust. The article says he was believed to have been asked to take a larger stake in the float than his original 19.9 percent commitment.
Yes. Centuria chief executive Nick Collishaw said the company plans to revisit the float in early calendar 2014, hoping market conditions will have improved, and that Centuria still aspires to create a listed real estate funds management platform.
The offering received strong support from domestic and Asian retail investors and backing from private investors, but it did not receive sufficient demand from institutional investors to complete the IPO.
The cancellation followed the shelving of a separate $367 million Pacific Retail REIT that planned to buy four suburban malls from CFS Retail. Advisers pointed to sharemarket volatility and pre-election uncertainty as reasons both floats did not proceed, and fund managers noted the assets were relatively small amid uncertain conditions for retail and smaller office trusts.
The cancellation highlights that market sentiment and institutional demand matter for property trust IPOs. Even offers with solid yields can be pulled if institutional backing is weak or market conditions are uncertain, so investors should watch demand indicators and broader market signals before participating in new real estate listings.
Investors are watching details of APN Property's planned $200 million float, which the article notes as the next significant listing in the sector following the cancellations.
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