Thursday, March 28, 2024
 
Columnist
Martin Hennecke
 
NEW CENT REIT
HKEx Stock Code : 01275 
 
Corporate Profile
New Century Real Estate Investment Trust is a Hong Kong collective investment scheme constituted as a unit trust and authorized under section 104 of the SFO. New Century REIT will be the first China-based hotel REIT in the world. It was constituted by the Trust Deed on June 10, 2013, to hold an investment portfolio of hotel assets in China. The REIT Manager will generally make the major business decisions of New Century REIT in Hong Kong. Upon the completion of the Global Offering, New Century REIT will own four 5-Star hotels, namely New Century Grand Hotel Hangzhou (狢秨じ常皊┍), New Century Resort Qiandao Lake Hangzhou (狢畄打秨じ安), New Century Grand Hotel Ningbo (圭猧秨じ常皊┍) and New Century Grand Hotel Changchun (琄秨じ常皊┍), and one 4-Star hotel, namely New Century Hotel Xiaoshan Zhejiang (秨じ拷猾繻). The Initial Hotel Properties are located in China, and will have an aggregate of 2,021 rooms and a total GFA of 321,090 sq.m. on the Listing Date. The Predecessor Group was the beneficial owner of the Initial Hotel Properties throughout the three years ended December 31, 2010, 2011 and 2012. Substantially all of the revenue of the Predecessor Group was derived from hotel operations. In 2010, 2011 and 2012, the Predecessor Group's revenue was RMB669.6 million, RMB772.7 million and RMB795.5 million, respectively, and its profit for the year was RMB30.4 million, RMB75.1 million and RMB77.4 million, respectively. RevPAR for the Initial Hotel Properties was RMB311, RMB355 and RMB357 in 2010, 2011 and 2012, respectively. The occupancy rate for the Initial Hotel Properties was 60.8% and the ADR was RMB588 in 2012.

New Century REIT's primary objective is to provide stable distributions to Unitholders and to achieve stable revenue, primarily through the Hotel Lease and Management Agreements between the subsidiaries of New Century REIT, the registered owners of the Initial Hotel Properties and lessors, and New Century Hotel Management, the Lessee and Hotel Manager (as the case may be). New Century Hotel Management will manage and operate the Initial Hotel Properties to prescribed operating standards and pay rent to the subsidiaries of New Century REIT for an initial term of ten years which may be renewed for a period of ten years, commencing from the Listing Date. Unless otherwise stated, references to ¨year〃 in the description of the Hotel Lease and Management Agreements throughout this Offering Circular refer to ¨lease〃 year rather than fiscal year or calendar year. New Century Tourism, a member of the New Century Group, has guaranteed the performance of obligations under the Hotel Lease and Management Agreements by the Lessee. In addition to the rent receivable under the Hotel Lease and Management Agreements, New Century REIT will also be entitled to the rental income from third party tenants for the leasing of commercial spaces at the Initial Hotel Properties after the Listing. Based on the existing leases as of the Latest Practicable Date, the contracted rental income will amount to RMB14.9 million and RMB31.5 million, respectively, in 2013 (after the Listing) and 2014. All the existing lease agreements have been registered with relevant authorities in accordance with PRC laws and regulations.

The REIT Manager estimates that the total proceeds to New Century REIT from the Global Offering will be approximately HK$1,645 million (based on the Minimum Offer Price) to approximately HK$1,974 million (based on the Maximum Offer Price).

The following table sets forth the sources of New Century REIT's funds following completion of the Global Offering, and the intended application of those funds. Uses of funds: Based on the Minimum Offer Price of HK$3.50: Acquisition of SPV (BVI) - 3,680 (HK$ millions); Repayment of Existing Indebtedness - 63 (HK$ millions); Transaction Costs - 123 (HK$ millions); Working Capital - 38 (HK$ millions). Based on the Maximum Offer Price of HK$4.20: Acquisition of SPV (BVI) - 4,216 (HK$ millions); Repayment of Existing Indebtedness - 63 (HK$ millions); Transaction Costs - 127 (HK$ millions); and Working Capital - 38 (HK$ millions).
Chairman Chen Miaolin Issued Capital (shares) 772M
Par Value N/A Market Capitalisation (HKD) 2,856M
 
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