SINGAPORE (Sept 22): Looks like what could have been Singapore's second-largest IPO this year won’t be happening anytime soon.

According to a Dow Jones report, Cromwell Property Group has shelved its plans for an up to EUR1.1 billion ($1.8 billion) initial public offering (IPO) in Singapore.

See: Aussie manager Cromwell Property to list $2.2 bil European REIT on SGX: reports

People familiar with the IPO process of Cromwell European Real Estate Investment Trust told Dow Jones Newswires this was due to tepid demand for its units as investors remain wary in a volatile global market.

Demand from institutional investors did not meet the company’s expectations as the deal size was too large.

Also, some investors were sceptical of the growth prospects in some of its European assets given their unfamiliarity with those markets.

Cromwell European REIT, a unit of the Australia-listed property group, started taking orders earlier this month.

Last Tuesday, a commentary in The Australian Financial Review had warned that Cromwell’s overall management fees were on the high side.

See: A negative view of Cromwell European REIT from Down Under

Its IPO portfolio with more than 10% vacancy was also considered high by Australian standards for listed trusts.

On Monday, ratings agency Moody’s Investor Service announced it was considering a potential credit rating downgrade on the group due to its high level of debt.

See: Property giant Cromwell faces credit rating downgrade from Moody’s

The group currently has a Baa3 rating, which represents the lowest Moody’s investment-grade credit rating and implied moderate risk.