Online real estate portal drops plan to raise up to $260m citing ‘IPO market sentiment’.
PropertyGuru, an online real estate portal focused on south-east Asia, has shelved plans for a stock market listing in Australia, the latest in a string of withdrawn share offerings in the country.
Singapore-based PropertyGuru said in a statement on Wednesday that its board had decided not to proceed with its proposed initial public offering in Sydney, where it was looking to raise as much as A$380m ($260m).
The shares, which were marketed in an indicative range of A$3.70 to A$4.50 each, had been due to start trading on the Australian Securities Exchange on Friday.
“Despite strong engagement throughout the process with prospective investors, the board and existing shareholders have determined not to proceed with the offer,” said Olivier Lim, PropertyGuru chairman, in the statement. “This decision took into account current IPO market sentiment.”
Private equity groups KKR and TPG, which own a combined 58 per cent stake in PropertyGuru, did not respond to requests for comment.
A person familiar with PropertyGuru’s plans said: “The economy [in Australia] is soft, the housing market is sketchy and recovering from a big drop, consumer sentiment isn’t great, and plenty of people think the market has peaked.” “IPOs have certainly lost momentum in Australia, falling from about 35 per cent share of the PE exit market in 2013-15 to 2 per cent for 2016 to first-half 2019,” said Johanne Dessard, Practice Director, Global Private Equity at Bain & Co. “PE firms tend to favour secondary sales and trade exits in Australia, which offer more certain acquisitions and quicker deals.”
PropertyGuru’s decision to abort its IPO comes after Latitude Financial, Australia’s biggest non-bank lender, pulled its listing just over a week ago, citing fears that shares would have fallen in their debut.
Latitude, which like PropertyGuru is backed by private equity group KKR, had been expected to raise A$1bn in what would have been Australia’s biggest listing this year.
Several smaller offerings have also been shelved. Bain Capital-backed Retail Zoo, which makes health juices, on Wednesday said it would not be going ahead with an IPO. MPC Kinetic, which provides services to upstream energy clients, did likewise two weeks ago.
“The risk appetite among fund managers is low for primary listings — it’s both a valuation and quality issue,” said Matthew Haupt, lead portfolio manager at Wilson Asset Management. “One factor is that some recent listings by private equity groups haven’t performed well, which points to a mismatch between valuation and quality.”
The Australian IPO market has been subdued this year, with just $1.15bn worth of new issues priced since January — the lowest amount since 2012, according to Dealogic data.
That is despite the S&P/ASX 200 index having risen by 18 per cent year to date, or about 1 percentage point more than the MSCI World, as the country’s central bank has cut interest rates to record lows to combat the slowing economy. The Australian benchmark touched an all-time high as recently as July.
Additional reporting by Jamie Smyth in Sydney