Singapore-based financial blog that aims to educate people on personal finance, investments, retirement and their Central Provident Fund (CPF) matters.

Monday, 9 May 2016

MBS Retail REIT Possible?

Marina Bay Sands (MBS), owned by Las Vegas Sands is considering selling or sub-dividing MBS when its government-imposed moratorium expires in 2017.

MBS parent Las Vegas Sands (LVS) was said to be considering selling its luxury mall either in full or a partially.
Interest in buying MBS was said to be high because of its high profile and visibility in Asia.
Shopping Centre Operators, Funds, Retail REITs and institutional investors from overseas are named as participants who might be interested in investing in MBS for global/Asia exposure.
The possible price tag attached to MBS is US$4/5 billion base on an US$150 million operating income.

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While many expect the mall to be sold in full to large investors (Institutions or Funds), we think there might be a possibility for the mall to be listed as a Real Estate Investment Trust (REIT) on the Singapore Exchange.
The benefits attached with it are pretty good
  1. LVS can continue to retain control over the mall's operations (sort of if it sets up a management team to take care of the mall) while getting back their invested capital.
  2. Average mom&pop investors can now stand to own a piece of this attractive mall as part of their investment portfolio.
  3. REIT has a structure that might reduce the tax burden of the mall.
  4. The mall will payout a quarterly distribution to its REIT unit holders like just every other REIT, which will provide LVS a quarterly stream of income.
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So maybe, we might be able to see a MBS REIT listed on the SGX at the end of next year?
A luxury mall in Singapore's prime location with stellar performance!

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