The underwriting of Allan Fife’s $179 million initial public offering of the Australian Industrial REIT has been brought forward after robust demand by a number of domestic institutional investors made pricing on Wednesday all but certain.
The IPO of eight warehouses, seven in Sydney and one in Melbourne, is priced at a 3.5 per cent premium to net asset value. It is scheduled to yield 8.25 per cent.
Bankers and the REIT met with investors in Singapore on Friday and were due to meet fund managers on Monday in Hong Kong. A typhoon forced them to fly back to Australia on the weekend to conduct a video conference call with asset managers on Monday.
Allan Fife wants to build a strong institutional investor base for the REIT, both in Australia and overseas.
Fife, a former Grant Samuel merchant banker, founded Fife Capital in 2006 as an independent real estate and advisory firm. He helped make money for a number of superannuation funds even after the collapse of Lehman Brothers Holdings Inc. roiled global markets.
UBS, CommSec, the securities unit of Commonwealth Bank of Australia, and National Australia Bank Ltd have found that investor demand for Australian Industrial REIT has been robust because of its high yield, low risk and uncomplicated structure.
In contrast, two other REITs that have failed to price in the market, Centuria and Pacific Retail, had either one single asset in the case of Centuria or a complicated structure with too many costs, in the case of Pacific Retail.
Australian Industrial REIT is Fife Capital’s first IPO. It is scheduled to begin trading on the ASX between October 21 and 23.