ARA may raise $1 billion in Singapore yuan REIT

ARA Asset Management Ltd's planned initial public offering of a yuan-denominated real estate investment trust (REIT) in Singapore could raise as much as S$1 billion ($790.6 million), three sources with knowledge of the matter said.

"The listing is targeted to be around June or July," one of the sources told Reuters.

ARA, part-owned by Hong Kong property giant Cheung Kong (Holdings) Ltd, is planning to inject Chinese office and retail properties from its flagship Asia Dragon Fund into what would be Singapore's first yuan-denominated REIT, sources said.

DBS Bank, Citigroup and Standard Chartered have already started working on the Singapore listing.

The $1.1 billion Asia Dragon Fund, set up in 2007, is fully invested and the manager has since shifted focus towards managing and divesting the assets, ARA said when it announced its financial results in February.

Many of the fund's properties are in China, although its mandate also covers Singapore, Hong Kong and Malaysia.

REIT IPOs in Singapore tend to be large because of the way they are structured. For instance, if ARA and related parties choose to retain 30 per cent interest in the Asia Dragon Fund's assets, they would have to buy 30 per cent of the units in the newly created REIT vehicle.

ARA now manages six listed REITs, including Singapore-listed Suntec REIT and Hong Kong-listed Hui Xian REIT , a yuan-denominated trust backed by Cheung Kong, the flagship property firm of Hong Kong tycoon Li Ka-shing.

It also has several unlisted funds and managed S$20.2 billion worth of real estate assets as of the end of last year.

DBS and Citigroup have declined comment, while ARA and StanChart could not be reached.

Last year, ARA put on hold plans to list a REIT with Qatari hotels and serviced residences worth about $1 billion in Singapore, due to geopolitical problems in the Middle East and North Africa.