April 21, 2011 / 7:43 AM / 9 years ago

RPT-UPDATE 1-Japan quake delays Malaysian IPO of world's largest Sharia REIT-source

(Repeats to additional subscribers)

* IPO delayed by about a month as managers resubmit prospectus - source

* Two Japanese properties near Sendai removed from asset composition - source

* Value of REIT to be reduced $21.8 mln from $1.05 bln (Adds details, quotes, comments)

By Min Hun Fong

KUALA LUMPUR, April 21 (Reuters) - The listing of Malaysia’s Axis Global Industrial real estate investment trust (REIT), the world’s largest sharia-compliant REIT, has been pushed back by about a month after two of its Japanese assets were damaged by the March earthquake, according to a source.

The source said that the two properties, which are located in Iwanuma near Sendai, the worst hit area in Japan, has been removed from the initial asset composition, which means the size of the REIT has been slightly reduced.

“The two properties were small contributors to the portfolio, and shouldn’t affect the IPO by that much,” the source with direct knowledge of the matter told Reuters.

Listing documents obtained by Reuters valued the two properties at 1.8 billion yen ($21.8 million) of an initial asset size of about 3.17 billion ringgit ($1.05 billion), making it the largest REIT compliant with Islamic or sharia laws. The REIT comprises of properties in Australia, Hong Kong and Japan.

Australia’s Goodman Group , which sold the properties to the REIT, will continue to be property managers directly or through their associated companies such as J-REP in Japan and GPS Hong Kong Whole Sale Ltd.

The IPO was initially slated to raise 2.15 billion ringgit to partially pay for the asset acquisitions, while the remainder would have been financed by debt. [ID:nL3E7EB0Y1]

The source said that a new listing prospectus reflecting the change in the asset composition had to be resubmitted to the Malaysian Securities Commission for approval.

Based on the initial timeline of the process, Axis Global was supposed to list in early June, but could now see the process pushed back to the end of the month or early July instead, said the source said, who was not authorised to speak to media.

Axis Global will also be the largest free float REIT in Malaysia with 98 percent of the REIT units to be offered during the IPO.

The REIT managers, Axis REIT Managers Sdn Bhd, which presently run Malaysian-listed Axis Real Estate Investment Trust , declined to comment on the development.

“No comment (on the Japanese properties), but everything is on track,” Stephen Hawkins, a part-owner of Axis REIT Managers and chief executive officer of Axis Global, told Reuters.

Axis REIT Management, which also manages Axis REIT , is planning to list Axis Global Industrial REIT, valued at over 3 billion ringgit to meet demand for new Islamic finance products. [ID:nL3E7EB0Y1]

The IPO has been set at an indicative price range of 1.00-1.05 ringgit ($0.329-$0.345) a unit, two sources who have seen the information memorandum had told Reuters. [ID:nL3E7EE0NW] ($1 = 82.465 Japanese Yen) ($1 = 3.016 Malaysian Ringgit) (Editing by Lincoln Feast)

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