SPH Reit – Allocation of units

The public offer of SPH Reit was 25 times subscribed (total application 2,100,000,000 units chasing for 83,982,000 units on offer). Balloting was held.

The allocation of units for the public offer of SPH Reit:

Range of units applied Balloting ratio No. of units allocated
1,000 to 9,000 27:50 1,000
10,000 to 19,000 26:50 2,000
20,000 to 49,000 25:50 3,000

For those applicants applying for up to 49,000 units, their chance of getting allocated is 50% to 54%. For those applying much more, their chances fall below 50%. Our family of three applied separately, 2 out of 3 was successful. Not bad based on the odds.

Starting 2pm today, SPH Reit begins trading at Singapore Stock Exchange. What will be the price like? If you are considering paying higher than 90 cents per unit (and not forgetting transaction costs), the projected distribution yield will fall below 5.79% for FY 2014.

Some information before making up mind to bid above 90 cents per unit:

For FY2014 (ending August 2014),

Projected Distribution per unit for full year: 5.21 cents

Let’s say you bid at $1.00 per unit for 1000 units, transaction costs can be $27.26. The projected dividend yield for you is 5.07%. The higher price you bid, the dividend yield will drop further.

Copyright © 2013, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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