Real estate fund manager ARA to sell 205m shares in IPO
Posted: 26 October 2007 2229 hrs

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SINGAPORE : Asian real estate fund manager, ARA Asset Management, plans to sell some 205.2 million shares in an initial public offering in Singapore.

The IPO consists of an international placement of 181.9 million shares as well as a public offer of 23.3 million shares.

Each share is priced at S$1.15.

ARA Asset Management is an affiliate of the Cheung Kong Group.

The real estate fund manager plans to use the funds from the IPO to grow its assets under management.

Justin Chiu, Executive Director, Cheung Kong, Chairman, ARA Asset Management, says: "We raise some money for our business expansion plan. Half of it (around S$40m) will be used to seed the Asian Dragon Fund. Another S$20m, we will use it as seed money for our other expansion plans.

"We plan to establish more REITS and set up more property funds.This will be used as seed money for these new ventures. The rest, another S$20 million, will be for our working capital in the future years."

As of June 30th, ARA has around S$7.2 billion, or US$4.7 billion, of assets under management.

Assets are mainly in the commercial property market in Singapore, Hong Kong and Malaysia.

The real estate fund manager wants to expand into new areas and markets.

Mr Chiu says: "If you look at our REIT portfolio, we are quite strong in commercial property, mainly retail and office properties, especially in Singapore, Hong Kong and Malaysia. We also want to expand into areas like hospitality and industrial logistics in the Asian region, for example, in India, China, Hong Kong, Malaysia, and possibly South Korea, Vietnam.

"Because our expertise is in Asia, at least in the next few years, our focus will also be in Asia. If the opportunity arises, we can also be looking at the Middle East because we have strong relationships and network in the Middle East. That could be our next step but we will concentrate in Asian region first."

The public offer will close at noon on October 31st and the shares will start trading on November 2nd. - CNA/ch