HONG KONG REIT LISTING FOR PRC-ASSET REAL ESTATE TRUST
July 02, 2007 | BY
clpstaff &clp articles &RREEF, the real estate and infrastructure investment arm of Deutsche Bank Group, successfully completed a US$320 million listing of a real estate investment…
RREEF, the real estate and infrastructure investment arm of Deutsche Bank Group, successfully completed a US$320 million listing of a real estate investment trust (REIT), RREEF China Commercial Trust (RREEF CCT), on the main board of the Hong Kong stock exchange. Unlike other Hong Kong-listed REITs, RREEF CCT is to be managed by an independent manager which will be an affiliate of RREEF. It will invest in commercial and mixed-use properties in China, Hong Kong and Macau.
The listing raised approximately HK$2.5 billion (about US$320 million) through a June 22 2007 Hong Kong initial public offering (IPO) and an international placement, based on an offering of 484.4 million units of RREEF CCT at HK$5.15 per unit.
Baker & McKenzie's REITs team led by partners Milton Cheng and Jason Ng advised HSBC Institutional Trust Services (Asia) as the trustee of RREEF CCT. Cheng says his firm is "keenly anticipating the development of the market for REITs with underlying PRC assets".
Paul, Hastings, Janofsky & Walker advised the issuer, led by Hong Kong partner Vivian Lam and Raymond Li. Comments Lam: "With the recent strong growth in China's commercial real estate sector, I am confident we will see more REITs listing in Asia comprising PRC commercial assets. Moreover we are seeing increasing interest for REITs to list on the mainland stock exchanges, and we are optimistic on the near-term development of this new market."
Proceeds from the offering and the related debt capital-raising were used to fund the acquisition of Gateway Plaza, which comprises two 25-storey towers connected by a three-storey atrium, with an appraised value of HK$3.98 billion (US$509 million), making it the first property owned by RREEF CCT. It is the second REIT listed in Hong Kong with underlying assets in the PRC, following the IPO in late 2005 of GZI Real Estate Investment Trust.
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