Perennial Real Estate, a firm set up by former CapitaLand (CATL.SI) retail chief Pua Seck Guan, has hired Goldman Sachs (GS.N), DBS (DBSM.SI) and Standard Chartered (STAN.L) to help it raise as much as $1 billion in a property trust IPO, sources with knowledge of the deal said on Wednesday.

 

Perennial intends to list a business trust in Singapore that will comprise mostly shopping malls in China, said the sources, who declined to be named because the matter has not been made public.

 

Pre-marketing of the deal is scheduled to begin later this month with the formal launch of the initial public offering slated for the end of March, the sources added.

  

A spokeswoman for Perennial, which is involved in the development and management of malls as well as property funds, said the firm had businesses in China, India and Singapore and it “continues to explore opportunties in these markets”.

 

The three banks either declined comment or could not be reached.

Under Singapore law, a real estate investment trust (REIT) faces restrictions on its level of borrowings and is obliged to distribute at least 90% of its income.

 

By putting its assets in a business trust, Perennial has greater scope to invest in properties under development and retains the flexibility of paying out a smaller portion of rental income to shareholders, two of the sources said.      

 

Pua, who is widely credited with building CapitaLand’s malls business, resigned from Southeast Asia’s biggest developer in September 2008, sparking a 7% fall in the firm’s share price.

 

His firm is currently leading the re-development of three commercial properties in Singapore and backers of his unlisted China funds include Beijing Hualian Group.

 

Besides China and Singapore, Singapore-based Perennial, whose management includes several former CapitaLand executives, is also active in India where it advises property giant DLF (DLF.BO) on the retail business.

 

Based on the indicative timeline, Perennial’s IPO will come to market around the same time as Mapletree Commercial Trust, which plans to raise over US$1 billion ($1.29 billion) through a REIT IPO in Singapore.

 

Mapletree Commercial Trust, whose assets include Vivocity, Singapore’s largest mall, is managed by Mapletree Investments, a wholly owned unit of state investor Temasek (TEM.UL).

 

DBS and Goldman Sachs are also on the Mapletree deal, along with Citigroup and Deutsche Bank.