Jackson Square, a property in Viva Industrial Trust's portfolio. (Photo: REITsWeek)Jackson Square, a property in Viva Industrial Trust's portfolio. (Photo: REITsWeek)

Singapore-listed Viva Industrial Trust (SGX:T8B) announced on 4 June that it has launched a private placement exercise to fund an asset enhancement initiative (AEI) at its property known as Technopark@Chai Chee.

The placement, which seeks to raise approximately SGD40 million, will see the issuance of up to 50,955,000 new stapled securities at the issue price of SGD0.785 per stapled security.

However should the exercise be oversubscribed, the offer size may be increased by 31,847,000 additional new stapled securities to raise additional gross proceeds of up to SGD25 million to bring the total gross proceeds to approximately SGD65 million.

The exercise will remain open until 5 June 2015.

“The AEI project that has been planned for Technopark@Chai Chee will enable Viva Industrial Trust to grow its portfolio organically and unlock latent value of the asset to take full advantage of the property’s prime location”, said the trust in a statement issued on 4 June.

The project will see the conversion of 214,951 square feet of gross floor area located in the ground-floor carpark and other unutilised areas into “white” use to serve existing tenants as well as residents living in the area.

The trust has said that it expects an incremental annual net property income of SGD9.8 million from the project. “Early indications from an independent valuer also suggests that the capital value of the asset could increase by SGD184.7 million from SGD195.3 million to approximately SGD380.0 million post completion of the AEI”, it added.

To date, 23% of the total space to be converted under the AEI has secured pre-committed leases from Decathlon S.A. and OWL Cafe. Retail offerings at the property are expected to open their doors to shoppers as early as end-2015.

Units of Viva Industrial Trust are currently listed on the Singapore Exchange at SGD0.835.

Viva Industrial Trust UE BizHub EAST
Viva Industrial Trust's BizHub EAST.

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.