Singapore's latest REIT and trust offering, Viva Industrial Trust (VIT), will IPO at a price of S$0.78 per unit. The stapled security will be a Singapore-focused business park and industrial trust. It has registered its final prospectus with the Monetary Authority of Singapore today, in conjunction with its planned listing on the Singapore Exchange.

Viva Industrial Trust is projected to give a yield of 8.8 per cent for 2014 at the IPO price of S$0.78

VIT is a stapled group comprising Viva Industrial Real Estate Investment Trust and Viva Industrial Business Trust. The trust is offering a total of 211,736,000 stapled securities for the IPO, each comprising a unit in the REIT and business trust each. VIT expects to raise approximately S$463.3 million in gross proceeds through the IPO.

Properties that will be injected into the initial portfolio include UE BizHub EAST, an integrated mixed-use business park-cum-hotel development, Technopark@Chai Chee, a business park situated near the Bedok and Kembangan MRT stations and Mauser Singapore, a brand new two-storey ramp-up logistics development located near Tuas Checkpoint and Jurong Port.

VIT’s distribution policy is to distribute 100 per cent of its distributable income for the period commencing the date of listing to 31 December 2015. Thereafter, VIT plans to distribute at least 90 per cent of its distributable income. VIT offers investors a distribution yield of 8.8 per cent for 2014, growing by 2.4 per cent to 9 per cent in 2015.

Wilson Ang, CEO for the Manager of VIT, said “VIT’s appeal lies in the fact that our Singapore-only asset portfolio has the highest proportion of business parks by asset value compared to other listed industrial S-REITs. Furthermore, two out of three of the properties in the initial portfolio are brand new. The rent premium that business parks typically command over other industrial asset classes, and the relatively long weighted average land lease of 45 years, offer good potential for steady returns.”

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.