Paradigm REIT Management Sdn Bhd chairman and independent non-executive director Tan Sri Shahril Ridza Ridzuan (fourth from left), together with CEO and executive director Selena Chua Kah Noi, strikes the gong during the Paradigm REIT listing ceremony in Kuala Lumpur. Also present (from left) are investment, finance and accounts director Chong Kian Fah, non-independent non-executive director Lai Cheng Yee, WCT Holdings Bhd group managing director Datuk Lee Tuck Fook and Paradigm REIT Management Sdn Bhd independent non-executive directors Datuk Ng Wan Peng, Kua Choo Kai and Dr Lee Khuan Eoi.
PETALING JAYA: Paradigm Real Estate Investment Trust
(Paradigm-REIT) made its debut on the Main Market of Bursa Malaysia yesterday, closing flat at RM1 with 44.59 million units traded.
The listing marks a significant milestone in Malaysia’s REIT landscape as it was the largest REIT initial public offering (IPO) in the past 13 years and one of the largest IPOs in Malaysia so far this year.
“We view this as a stable and encouraging start, especially in a market where volatility has become the norm. The strong support from both institutional and retail investors affirms confidence in our portfolio and long-term strategy.
“We remain focused on delivering consistent value to our unit holders and executing our strategy in making our assets more value-accretive,” said Paradigm-REIT Management Sdn Bhd chairman Tan Sri Shahril Ridza Ridzuan.
Paradigm-REIT is a pure retail-play REIT with three retail malls – Paradigm JB, Paradigm PJ and Bukit Tinggi Shopping Centre – in its portfolio.
The three assets are collectively valued at RM2.4bil and strategically located in high-traffic, high-growth urban areas, Paradigm-REIT said in a statement yesterday.
Kenanga Research said it sees moderate income risk attached to Paradigm PJ given a more saturated market in Selangor, but added it believes the biggest income driver lies in Paradigm JB in Johor.
Bulk rent revisions for Paradigm JB, which is benefitting from the development of the Johor Baru–Singapore Rapid Transit System, will likely propel decent net profit growth in the near-to-medium-term.
All in, based on a dividend yield spread of 2.75%, Kenanga Research said it derives a fair value of RM1.10 against the IPO price of RM1 per unit.
Paradigm-REIT said it is committed to distributing at least 90% of its distributable income on a half-yearly basis, making it an appealing proposition for income-seeking investors.
The research house said future injections into the REIT from sponsor WCT Holdings Bhd include Hyatt Place Johor Baru, Le Meridien Petaling Jaya, Premiere Hotel in Klang, and Gateway@klia2 at the Kuala Lumpur International Airport.
Kenanga Research said it believes Paradigm-REIT will need to exercise strong vigilance in screening asset quality, valuation assessment and funding strategies to ensure that any future acquisition is positive for net distribution per unit.
The research house said WCT Holdings’ current gearing stands at 34% and believes the group’s earnings could increase by 9% next year.
Maybank Investment Bank was the principal adviser, sole managing underwriter, and lead bookrunner for the IPO.
CGS International and AmInvestment Bank were joint underwriters and bookrunners, while RHB Investment Bank Bhd was a joint bookrunner.
