BHG REIT IPO to raise $120 million

Chinese retail player Beijing Hualian Group is planning to list its BHG REIT in Singapore this year.

If it proceeds, it will mark just the first IPO on the Singapore SGX Mainboard in 2015.

The BHG Retail REIT wants to issue 150.1 million shares at $0.80 per unit which gives the listing a value of $120 million.

BHG REIT’s initial portfolio will comprise a 60 per cent interest in Beijing Wanliu Mall in Beijing; Hefei Mengchenglu Mall in Hefei’s North First Ring retail hub; Chengdu Konggang Mall, in an emerging residential area in Chengdu; Dalian Jinsanjiao Property, leased to a hypermarket; and Xining Huayuan Mall in Xining’s Ximen-Dashizi retail hub. These properties have a combined gross floor area of about 263,688 sqm.

Under its plan, BHG’s existing Singapore-incorporated units Beijing Hualian Group (Singapore) International Trading and Beijing Hualian Mall (Singapore) Commercial Management, will subscribe for 148.31 million and 24.636 million shares, respectively.

And it has four cornerstone investors already on board who would subscribe for a total of 169.651 million units. These investors are China Hi-Tech Holding Company, China Life Insurance Company, China Merchants Bank Asset Management and Dr Chanchai Ruayrungruang.

With all these investments rolled together, the gross proceeds of the IPO would come to $394.2 million and give the REIT a market capitalisation of about $597.2 million post float.

The listing is sponsored by Beijing Hualian Department Store Company, part of the BHG Group, with more than 20 years in retailing. The company manages retail properties, operates supermarkets and hypermarkets and retail distributorships as well as a luxury department store in Beijing.

“As part of the BHG Group, BHG Retail REIT will benefit in terms of acquisition growth in China where the sponsor has an active real estate presence,” the group says in its prospectus.