(By Jared Heng)
Units of Treasury China Trust (TCT) have commenced trading on the Main Board of Singapore Exchange Securities Trading Limited (SGX), international property group, Treasury Holdings, announced Monday.
TCT owns a high-quality portfolio of commercial income- producing real estate and development projects located in China’s financial and political centres of Shanghai and Beijing. These projects are proactively managed by Treasury Holdings Real Estate Pte Ltd in its capacity as Trustee Manager.
“This strategic move to list in Singapore realises our long-term commitment to Asia and enables us to tap into the strong capital inflows experienced in this region through our unique business model,” said Mr Richard Barrett, Chairman of Treasury Holdings Real Estate Pte Ltd.
As a total return vehicle enjoying significant competitive advan- tage over REIT structures and operating at a lower risk profile than pure development vehicles, TCT offers its unitholders 100 per cent exposure to commercial real estate in China, according to Treasury Holdings. “One hundred per cent of TCT’s assets are denominated in RMB,” said Mr Richard David, Director and Chief Executive Officer of Treasury Holdings Real Estate Pte Ltd.
For the Financial Period 2010, Treasury Holdings has projected a tax-free annualised distribution yield of 5.8 per cent. Financial Period 2010 refers to the period commencing on or from the date of issue of the Units pursuant to the Scheme of Arrangement and ending on 31 December 2010.
Barrett explained the move to list TCT in Singapore, saying, “There is a strong investor base here who are used to investing in foreign companies with assets located geographically apart from Singapore but still within the Asian region.” He also cited Singapore’s “strong regulatory oversight” and good corporate governance as other reasons.
Barrett added that the Asian listing was for the long-term benefit of unitholders and may provide an opportunity for TCT units to trade closer to net asset backing. “We are confident of delivering total return to our unitholders over the medium term underpinned by the demand from tenants for high quality, well-managed com- mercial property in China and our internal development pipeline,” he said.
Treasury Holdings is represented by more than 70 dedicated personnel in China providing comprehensive asset and financial management services exclusively to TCT’s portfolio of quality income-producing office and retail properties, with a net asset value of about S$970 million as at 31 December 2009.
TCT’s existing property portfolio in Shanghai includes Central Plaza, City Centre and Treasury Building, which were completed in 1998, 2002 and 2006 respectively. Of these, City Centre is the largest asset by area. Two other projects currently under devel- opment ‒ Beijing Logistics Park and City Centre Extension ‒ are scheduled to be completed in 2011 and 2012 respectively.
“With a solid track record of success in the management of the existing portfolio since 2007, our seasoned team of investment and asset management professionals will continue to be focused on proactive asset management of our existing portfolio and potential new commercial property investment opportunities with the aim of delivering strong total return to our investors,” David said. “The leasing market reflected a challenging environment, particularly the office sector, from late 2008 throughout 2009. 2010 has witnessed a stabilisation of the sector and we now expect improving conditions over the next 18 months. Conversely, the retail market has remained strong throughout this period and our coalface experience reinforces this view with our retail portfolio experiencing near full occupancy.”
J.P. Morgan acted as Sole Financial Adviser and Issue Manager in relation to the listing by introduction.