ERA Realty’s CEO Jack Chua.
ERA Realty Network, the second biggest property agency here by agent numbers, plans to relist on the Singapore Exchange (SGX) to take advantage of the anticipated recovery in the housing market, reported the Business Times.
The firm and other related businesses will be floated under APAC Realty, with each share to be sold at 66 cents, according to the registered prospectus for the initial public offering (IPO).
“We are now at the initial stage of a market run. For the next one year, everyone knows the market will be good, so it’s only logical to list now,” said ERA Realty’s chief executive Jack Chua, who is also the CEO of APAC Realty.
The listing’s goal is to provide more funding to fuel ERA’s expansion in the Asia Pacific region. Of the IPO’s estimated net proceeds of $55 million, $27.1 million will go to APAC Realty, whose business is the fully-owned ERA Realty.
In turn, a larger network will help drive the brokerage business in Singapore via cross-selling as Chua expects a return of foreign buyers in the city-state, particularly the Chinese who are attracted by the lower prices of luxury real estate, while other markets have raised property taxes.
“Many Singaporeans are also buying foreign properties, so establishing our foreign presence will allow us to advise Singaporeans better,” he noted.
This move is also expected to improve its competitive edge. ERA Realty presently has 6,272 property agents in Singapore. It had the most number of agents here for six straight years until PropNex Realty and Dennis Wee Group merged, forming a group with a total of 6,858 agents.
Under the IPO, APAC Realty will offer 4.4 million shares and 44.5 million shares to retail investors and institutional investors respectively. At the same time, another 39.3 million shares will be sold to cornerstone investors Fidelity Investment, Soilbuild Group executive chairman Lim Chap Huat, Singapore-based Azure Capital and serial investor Wang Yu Huei.
The transaction will close by Tuesday (26 September) and the shares will start trading by next Thursday.
Previously, ERA Realty was listed under Hersing Corporation. But the latter’s founder sold it to Northstar Group in August 2013 one year after delisting.
Currently, Northstar Group owns 80 percent of APAC Realty, while the remaining 20 percent is held by APAC Realty’s management. After the IPO, their stakes will be proportionately diluted, but if the greenshoe option for 9.75 million shares is exercised in full, both firms will retain a combined stake of 72 percent.