Prime US Reit prices IPO at US$0.88 per unit

Prime US Reit is set for a listing here after registering its final prospectus with the regulator yesterday.

The units are priced at 88 US cents each, which represent a distribution yield of 7.4 per cent this year and 7.6 per cent in 2020.

The trust's manager is jointly owned by its sponsor KBS Asia Partners (60 per cent); Keppel Capital Two (30 per cent), a wholly owned subsidiary of Keppel Capital Management; and Experion Holdings (10 per cent), a wholly owned subsidiary of AT Holdings.

Times Properties, a wholly owned unit of Singapore Press Holdings, has entered into a call option agreement to acquire a 20 per cent stake from KBS Asia Partners after the listing, subject to approval.

SPH owns The Straits Times.

Prime US Reit has an initial portfolio of 11 Class A and freehold office properties with a total appraised value of US$1.2 billion (S$1.6 billion).

They are in nine key United States markets: San Francisco, Salt Lake City, Denver, St Louis, Dallas, San Antonio, Philadelphia, Washington D.C. and Atlanta.

They have a total net lettable area of 3.4 million sq ft, and a portfolio occupancy rate of 96.7 per cent.

Sponsor KBS Asia Partners is linked to KBS, one of the largest US commercial real estate managers with US$11.6 billion of assets under management as at Dec 31, 2018.

Unit holders can get distributions in Singapore dollars or US dollars.

The offering of 335.2 million units consists of an international placement of 318.4 million units to investors outside the US and at least 16.8 million units to the public here.

Concurrently, Prime US Reit has secured commitments of US$317 million from nine cornerstone investors including AT Investments, Keppel Capital, Times Properties and Hiap Hoe Investment.

These investors have subscribed for an aggregate of 360.3 million units, representing 39 per cent of the total units in issue immediately after completion of the offering.

KBS Real Estate Investment Trust III, which is selling the initial portfolio to Prime US Reit, is subscribing to 228.4 million units or a 24.7 per cent stake in Prime US Reit.

The offering is expected to raise gross proceeds of US$813 million.

The public offer opened yesterday and will close at noon on July 15.

Trading of the units is expected to start at 2 pm on July 19.

DBS Bank is the sole financial adviser and issue manager for the offering.

A version of this article appeared in the print edition of The Straits Times on July 09, 2019, with the headline 'Prime US Reit prices IPO at US$0.88 per unit'. Print Edition | Subscribe