SINGAPORE (Feb 17):  Victor Song was all smiles after Elite Commercial REIT (Elite REIT) got off to a flying start in its trading debut on Feb 6. Singapore’s first sterling-denominated REIT with a focus on assets in the United Kingdom opened at GBP0.705, 3.7% higher than its IPO price of GBP0.68. The counter later ended its first trading session at GBP0.71. “I’m very happy for our share price to pop on Day 1 and there is sufficient volume to support this… The REIT’s success is based on the strong support we received,” says Song, managing director of Elite Capital Partners, the sponsor of Elite REIT.

To be sure, Elite REIT was taking a plunge into uncharted waters with its Singapore listing. Moreover, with Elite REIT raising just GBP130.9 million ($235.5 million), the IPO size was smaller compared to last year’s REIT listings.

On hindsight however, portfolio quality and IPO yield were among the reasons why the REIT was received positively by investors. For 2020, Elite REIT’s IPO price translates into a forecast distribution yield of 7.1%, which is relatively high for a portfolio with almost no counterparty risk.

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