An Australian real-estate company has pulled its plans for a billion-dollar initial public offering in Singapore following tepid demand for its units, said Wall Street Journal.

Reuters reported that Sea, a Southeast Asian startup formerly known as Garena, has filed for a U.S. initial public offering of up to $1 billion.

These are blows to Singapore’s Stock Exchange which is said to be among the few Asian exchanges lining up for a share of the pie from the Saudi Arabian oil giant Aramco’s planned IPO.

The recent setbacks show investors are wary in a volatile global market.

Cromwell European Real Estate Investment Trust, a unit of Australia-listed Cromwell Property Group, had started taking orders earlier this month for the up to EUR1.09 billion (US$1.30 billion) deal, which would have been Singapore’s second-largest IPO this year.

It would have also been the first company to offer shares denominated in euros in the city-state, which is one of the sought-after destinations for REITs in Asia.

People familiar with the process said that the demand from institutional investors didn’t meet the company’s expectations. Also, some investors were sceptical of the growth prospects in some of its European assets given their unfamiliarity with those markets.

Sea is backed by Chinese internet giant Tencent and is one of the region’s homegrown startups evaluated at US$3.8 billion in 2016.
Similar to Tencent, it has built a wider internet platform, which spans retail, payments and messaging, around a profitable gaming business.

Its retail unit is Shopee, where gross merchandise value (GMV), or the value of sales transacted on its platform, is now running at a yearly rate of more than $3 billion.

Sea says Shopee was number one by GMV in the first half of the year for a region it calls “Greater Southeast Asia” – which oddly includes Taiwan, further to the north.

But the IPO market is not the only one suffering from the tepid market.

The online marketplace is also facing its limitations with the recent entry of Amazon in Singapore.

Rakuten, the Japanese online retail platform closed shop in Singapore, Malaysia, and Indonesia last year because it was wary of absorbing large income-statement losses as a listed company.

It will be interesting to watch these spaces as Southeast Asia’s IPO market becomes increasingly difficult to accommodate large IPO’s while the online marketplace faces fresh challenges from American giants.

Bywftv