SINGAPORE – Prime US Reit debuted on the Singapore Exchange (SGX) on Friday afternoon (July 19) at US$0.865 per unit, down 1.7 per cent or US$0.015 from its initial offer price of US$0.88. The counter was trading at US$0.87 as at 3.22 pm.
Earlier, before the market opened on Friday, the Reit’s manager said it had received applications for 1.2 times number of units originally on offer, netting the Reit about U$346.2 million at a price of U$0.88 per unit if all units are allocated.
Prime US Reit has an initial portfolio of 11 Class A and freehold office properties across nine office markets in the US.
“The successful IPO of Prime US Reit is a testament to the market’s confidence in our stable and resilient IPO portfolio that provides a unique geographically-diversified exposure to the growing US commercial real estate sector, as well as a strong potential for acquisition growth beyond the IPO portfolio through leveraging the established KBS platform,” said Barbara Cambon, chief executive officer and chief investment officer of KBS US Prime Property Management Pte Ltd, the manager of Prime US Reit.
“As Asia’s global Reits hub, we are delighted to welcome Prime US Reit to our growing family of Reits with international assets. This is our third pure-play US Reit listing this year, bringing the total number of US-focused Reits to five, which demonstrates rising investor interest in US real estate,” said Mohamed Nasser Ismail, head of equity capital markets, SGX.
“The three US Reit IPOs on SGX this year have raised close to US$1.7 billion – making them the top three IPOs in Asean year-to-date by funds raised – with Prime US Reit raising the highest at US$612 million.”
Prime US Reit is the third US office Reit to list here after Manulife US Reit and Keppel-KBS US Reit. Its listing brings the total number of SGX-listed Reits and property trusts to 45, with a combined market capitalisation of about $110 billion.
Together with real estate companies, the overall SGX real estate cluster has a combined market capitalisation of over $190 billion, said Mr Nasser.
Prime US Reit’s public offer received applications for 42.4 million units versus the 40.9 million units that were on offer.
For the international placement tranche, applications for 351.1 million units were made, versus the original 294.3 million on offer.
Stabilising manager Merrill Lynch (Singapore) has over-alloted an additional 22.7 million units to the placement tranche, bringing the total units offered there to 317 million.
The over-allotment units will be borrowed from substantial shareholder KBS REIT Properties III LLC, which has been allocated 79.5 million units.
However, excluding the over-allotment units and interest from parties under rule 240 of the SGX’s listing manual, which includes interested persons, interest received for the Prime US Reit was lower at 0.8 times of offer.
Including the over-allotment units, 127 million units were allocated to rule 240 parties.