So Prime REIT’s IPO Balloting Results are out (see cover above), and let’s just say they’re not fantastic.
IPO Balloting Results
To break down the results very simply:
Everyone who applied got something – You got it. Everyone who applied for Prime REIT, basically got something. Almost as good as the Singapore Savings Bonds!
Everyone who applied up to 99,900 units got everything they applied for – At S$1.20 per unit, it basically means that anyone who applied for up to S$119,880 worth of units at the IPO got their full allocation. That’s actually really generous by the issuer, depending on how you look at it…
As the third US REIT to come in just a few months (following ARA US Hospitality Trust and Eagle Hospitality Trust), I suppose it’s no surprise that the retail crowd is getting sick of US REITs. I know because I’m pretty sick of them myself, having looked at 3 different US REITs in 3 months with not that much to differentiate them.
Throw in all that global macro uncertainty, talk about a 2020 recession, and it probably wasn’t a surprise for the subscription rate to be so low.
Anyway, what’s more interesting is what comes next.
With the poor public reception for Prime REIT, how will the day one IPO trading performance be like?
These units start trading at 2pm on Friday, 19 July 2019, and I would be pretty interesting to see how they perform.
Eagle Hospitality Trust was a bit of a disaster, and I doubt that would happen here again. But if the price does dip post-IPO, it could be quite an interesting buy. I’ll be keeping an eye on this one for sure.
What do you guys think? Share your thoughts in the comments section below! I respond personally to all comments!