CapitaMalls Asia, which owns shopping malls in the region, may raise as much as 863.8 million ringgit ($371.7 million) through an initial public offering of its Malaysian unit in the country’s second-biggest IPO this year.

CapitaMalls Malaysia Trust is offering as many as 719 million units at 1 ringgit to 1.10 ringgit each for institutions and 67.5 million units for individual investors at as much as 1.08 ringgit, according to a term sheet sent to investors today.

 

The final price will be determined on July 8 and the company is scheduled to list on July 16, according to the document. CIMB Investment Bank Bhd., JPMorgan Chase & Co. and Maybank Investment Bank Bhd. are jointly managing the sale. Individual investors will get a refund if the final price for institutional investors is lower than the retail price, it said.

 

The IPO follows the 1.5 billion ringgit raised by Sunway Real Estate Investment Trust in its initial sale last week and underscores rising investor appetite for equities in Malaysia amid an economic rebound from last year’s recession.

 

The REIT “is deemed a defensive play, if you look at the trend over the last 10 to 15 years, the retail sector is kind of resilient,” Pankaj Kumar, who oversees about US$560 million as chief investment officer of Kurnia Insurans Bhd. in Petaling Jaya, outside of Kuala Lumpur. “CapitaMall Malaysia is a very focused retail REIT, and on that basis it stands out.”

 

Singapore-based CapitaMalls Asia, part of Southeast Asia’s biggest developer CapitaLand, owns shopping malls in China, India and Singapore. CapitaMalls Malaysia is the owner of the Sungei Wang Mall in Kuala Lumpur, The Mines mall, which is south of the city center, and Gurney Plaza in Penang, according to the company’s prospectus published in Malaysian newspapers today.

The property trust is Malaysia’s biggest “pure-play” shopping mall REIT, it said.

 

The IPO is “part of our strategy to list in the home markets of our assets, so as to tap into local capital,” CapitaMalls Asia Chief Executive Officer Lim Beng Chee said in a speech today. “By doing so, CapitaMalls Asia is able to recycle capital for reinvestment and strengthen our financial capacity to seize growth opportunities in Malaysia.”

 

Malaysia’s Employees Provident Fund and Great Eastern Life Assurance (Malaysia) Bhd. have agreed to subscribe to 11.4% of the institutional share offering, the company said separately in an e-mailed statement.

 

Tourist arrivals in Malaysia reached a record 23.6 million in 2009, from 22 million a year earlier, according to data from the Malaysia Tourism Promotion Board.

 

Southeast Asia’s third-largest economy has emerged from its first recession in a decade. The country may expand by between 4.5% and 5.5% this year after shrinking 1.7% in 2009, Bank Negara Malaysia said in its annual report on March 24.

 

“We see acquisition opportunities in Malaysia’s shopping mall sector, with its fragmented ownership structure,” CapitaMalls Asia Chief Lim said today. “CapitaMalls Asia will give the Malaysian trust a right of first refusal over any retail properties we may acquire in future.’”