Ascendas cancelled plans on Tuesday for an initial public offering of its hospitality trust.
The Singapore-based REIT cited tough market conditions as the reason for scuttling the IPO, which it had expected to raise S$800 million (US$622 million). The FTSE Straits Times Index is down about 7% since the beginning of May as investors are wary of the eurozone crisis and China’s economic slowdown.
Ascendas initially hoped to raise S$1 billion (US$778 million) from the IPO but scaled back after premarketing the offer earlier this month.
Ascendas was reportedly set to use the money to purchase the remaining stake of a fund that owns 7% of the Mirvac portfolio of 43 hotels in Australia and New Zealand. Ascendas bought 49.2% of the fund for €46 million (US$59.8 million) with Accor, Courcouronnes, France, when Accor bought out Mirvac Hotels & Resorts, Sydney, earlier this month.
Ascendas isn’t the only Singapore hospitality REIT to have withdrawn an IPO recently. Last month M&L Hospitality Trusts cancelled its IPO on the Singapore Exchange, which it had expected to raise S$509 million (US$396 million).