19 Tai Seng Avenue (Viva Industrial Trust)Viva Industrial Trust's 19 Tai Seng Avenue (Viva Industrial Trust)

Singapore-listed industrial stapled security, Viva Industrial Trust (SGX:T8B) has declined an offer from Ho Lee Group to acquire a property in Ang Mo Kio Property for SGD255 million.

The offer was made pursuant to a right of first refusal (ROFR) agreement entered into between Viva Industrial Trust and Ho Lee Group in October 2013. Ho Lee Group has received an offer from an unrelated third party to acquire the Ang Mo Kio Property at a purchase consideration of SGD255 million, triggering the ROFR.

“The managers have considered the offer and are of the view that the acquisition of the Ang Mo Kio property at the present point in time would not be in the best interests of Viva Industrial Trust given that a major equity fund raising exercise would be required to partially finance the acquisition of the Ang Mo Kio Property in order for Viva Industrial REIT to maintain its gearing ratio at the current level”, said the trust in a 13 January statement.

“The acquisition of the Ang Mo Kio property would not be accretive to the distribution per stapled security of Viva Industrial Trust if the managers were to undertake such a major equity fund raising exercise under the prevailing depressed equity market conditions”, it added.

However accordance with the terms of the ROFR, sale of the Ang Mo Kio property would need to occur within 12 months from the date that Viva Industrial Trust received the offer, failing which the disposal of the Ang Mo Kio Property after the aforesaid 12-month period shall again remain subject to the ROFR.

Units of Viva Industrial Trust are currently listed on the Singapore Exchange at SGD0.695.

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.