HONG KONG, May 30 (Reuters) - Langham Hospitality Investments, an investment trust controlled by property developer Great Eagle Holdings Ltd, fell as much as 5 percent in early trading in its Hong Kong debut on Thursday, underscoring concerns that rising yields in the United States could reduce demand for REITs and trusts in Asia.
The investment trust opened at HK$4.75, below the HK$5.00 IPO price set last week and compared with a flat open for the benchmark Hang Seng index.
Demand from retail investors was nearly 11.7 times the number of units on offer, with the institutional tranche of the IPO “moderately over-subscribed,” Langham Hospitality said in a filing on Wednesday.
The debut comes after a plunge in benchmark indexes for real estate investment trusts (REITs) in Singapore and Hong Kong in recent days on concerns that the U.S. Federal Reserve could soon scale back its massive bond buying programme, pushing yields on U.S. Treasuries higher and reducing the relative appeal of REITs and other yield-paying securities.
The Hong Kong REIT index has dropped 6.2 percent since reaching an all-time high last week, while the REIT index in Singapore has fallen in eight of the past 10 sessions, down 8.7 percent.
The listing of Langham Hospitality comes ahead of $2.1 billion worth of deals from real estate investment trusts (REITs) and investment trusts in the city in coming weeks, including an up to $1 billion offering by NW Hotel Investments, which is part of New World Development.
Deutsche Bank AG and HSBC Plc were hired as sponsors and joint global coordinators of the IPO, with Citigroup also acting as a joint bookrunner. (Reporting by Elzio Barreto; Editing by Chris Gallagher)