November 2, 2009, 3.40 pm (Singapore time)

Update: CapitaMalls Asia eyes US$2b in S'pore IPO

* Sets price range of $1.98-$2.39 a share: email
* To sell 1.165 billion, or 30% of shares outstanding
* CapitaMalls owns 86 properties in Asia
* CapitaLand eyes growth in China, Vietnam

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SINGAPORE - CapitaLand's Asian shopping malls unit is looking to raise about US$2 billion in its Singapore initial public offering, a move that will help boost the warchest of Southeast Asia's biggest property developer.

CapitaLand wants China to account for 35-45 per cent of its assets from 28 per cent now, and is seeking to increase Vietnam's share to 5-10 per cent of assets

CapitaLand will float a 30 per cent stake in its wholly owned unit CapitaMalls Asia Ltd, which has 86 retail properties valued at around $20.3 billion (US$14.5 billion) in Singapore, China, Malaysia, Japan and India.

The listing move comes at a time when the pipeline for new offerings is becoming crowded and a string of Chinese real estate IPOs have received a lukewarm response from investors.

Malaysia's Maxis is trying to raise US$3.7 billion in its initial public offering in Kuala Lumpur, the biggest in Southeast Asia for more than a decade.

In Hong Kong, Longfor Properties is seeking to raise US$916 million a few days after Evergrande Real Estate Group raised US$729 million in its scaled-back IPO.

Also, shares of department store chain Myer Holdings Ltd tumbled as much as 9 per cent on their debut on Monday in its US$2 billion float, Australia's biggest in two years.

Analysts said the listing of the unit will boost CapitaLand's ability to buy and build more property assets in Asia.

CapitaLand wants China to account for 35-45 per cent of its assets from 28 per cent now, and is seeking to increase Vietnam's share to 5-10 per cent of assets.

Not cheap?
CapitaMalls said it will sell 1.165 billion shares at an indicative price range of $1.98-$2.39 a share, according to an email sent to potential investors, which was seen by Reuters.

'We like the stock that comes with the pan-Asia theme. The way it's structured gives investors cashflows from the developed malls and upside from the greenfield projects,' said Neo Chiu Yen, equity research asia, ABN Amro Private Banking.

'But the pricing looks a bit 'full' to me. It won't be cheap, but it should give investors some incentives to participate.'

Management roadshows are planned between Nov 3 and Nov 16 and pricing for the international tranche of the offering is due on Nov 16, the email said.

The Singapore public offer period is between Nov 18 and Nov 23. Listing will likely take place on Nov 25, the email said.

'Our strong financial position and capital structure will provide us with the financial flexibility to fund our growth and expansion,' the CapitaMalls prospectus, filed on Monday, said.

'These opportunities include acquisitions of land for greenfield projects, brownfield projects and completed malls, asset enhancement initiatives and other merger and acquisition opportunities in Asia.'

JPMorgan is the sole financial adviser, and issue manager with DBS. The two banks are also bookrunners with Deutsche Bank and Credit Suisse, according to the prospectus.

Shares of CapitaLand were down 0.7 per cent at 0427 GMT. -- REUTERS