ESR-REIT's UE BizHub EAST. (Photo: REITsWeek)

Amid challenging market conditions, managers of ESR-REIT and Viva Industrial Trust (VIT) have jointly announced details of a proposed merger that will create Singapore’s fourth largest industrial REIT with an asset base of SGD3 billion (USD2.2 billion).

The resulting REIT is described as one that would enjoy greater resilience and flexibility, as well as a strengthened balance sheet with increased debt tenures, greater access to capital and a competitive cost of debt.

“Size does matter for REITs. This merger will be a milestone transaction that will create a portfolio that is stronger, more resilient and better-diversified. Leveraging our respective capabilities in operational and capital management, we will be in a strong position to deliver value to unitholders”, said Adrian Chui, Chief Executive Officer of ESR-REIT’s manager.

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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.