Property

Goldman in bid for Japanese retail investor - Goldman Sachs underlined its bullish view of Japan's real estate market by launching a takeover bid for Simplex Investment Advisors that values the Japanese real estate investor at Y156.95bn ($1.34bn) [Financial Times - Asia Pacific]

HBOS to offer new mortgage at 125% of value - HBOS, the UK's biggest lender, is to start offering mortgages that allow people to borrow more than the value of their property, in a move that will make such products more accessible. [Financial Times - Financial Services]

Japanese regional banks to merge - The anticipated consolidation of Japan's regional banking sector took a step forward as Bank of Fukuoka said it would increase its stake in Kyushu-Shinwa Holdings. [Financial Times - Asia Pacific]

The listing last month of the first real-estate investment trust consisting solely of mainland Chinese properties was a ground-breaking step, not only in the development of Hong Kong"™s nascent reit market but also in a regulatory sense.

The innovative legal structuring of Guangzhou Investment Company"™s GZI Reit has created a template for investors to tap the value in commercial property in China, while enjoying the benefit of the liquidity associated with investing in a listed vehicle.

......transaction involved packaging four prime shopping and office buildings owned by Guangzhou Investment, a Guangzhou municipal government arm, into a reit for listing. GZI Reit Asset Management Limited, the trust manager, set up a Hong Kong holding company to acquire the properties held through British Virgin Islands special-purpose vehicles, and devised an asset-holding structure suitable for listing via an initial public offering in Hong Kong. The listing vehicle raised US$230m in the IPO. Such a first-to-market deal had to clear regulatory hurdles. The Hong Kong Securities and Futures Commission (SFC) had revised its rules a few months earlier to let locally listed reits invest in overseas properties.

Prosperity Real Estate Investment Trust and Agile Property Holdings have attracted intense interest from retail investors with the retail tranches locking up more than $100 billion in cash so far.

......The retail tranche of Prosperity's $1.91 billion float was about 300 times covered while the institutional tranche received US$4.2 billion worth of orders, equivalent to an 18 times oversubscription, the sources said.

Under the clawback mechanism, the reit will allocate 50 per cent of its offer shares to retail investors from the original 10 per cent allocation.