Monday, January 18, 2010

ARA and CWT Discussing $1 Billion Sale Leaseback to Form New REIT in Singapore - January 15, 2010

Shares of ARA Asset Management and CWT rose yesterday, when both companies confirmed plans to launch a regional logistics real estate investment trust (Reit) together.

ARA, a real estate fund manager tied to Hong Kong tycoon Li Ka-shing’s Cheung Kong group, saw its shares hit a year high. They gained seven cents or 7.8 per cent to close at 97 cents.

Shares of logistics firm CWT put on two cents or 2.4 per cent to close at 84.5 cents. The counter has hovered above the 80-cent mark since late December.

Investors were probably cheered by news of the Reit venture between ARA and CWT. In a joint release, the firms said that they are ‘in advanced confidential discussions’ and have made a ‘confidential submission’ to the Singapore Exchange (SGX) to set up and list a logistics Reit here. They have also made submissions to other relevant regulatory authorities.

‘It should be noted that no definitive agreements whatsoever have been executed,’ they highlighted. They added that they have not obtained approvals from regulators, including SGX and the Monetary Authority of Singapore.

ARA and CWT were responding to a Reuters article, which said that the two plan to launch a Reit holding properties worth some $1 billion, and DBS would manage the listing. The information came from ‘a source involved in the transactions’.

While both companies confirmed that they were working together on a Reit, they did not verify the other details mentioned in the Reuters report.

In mid-December, CWT gave the market some clues on its plans. It received a query from SGX on an increase in its share price, and revealed that it was in talks to sell and lease back its logistics facilities for the potential creation of a logistics Reit. Sphere: Related Content

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