SINGAPORE - The managers of Viva Industrial Trust (VIT) declined an offer on Monday (Oct 9) from Ho Lee Group to buy its Ang Mo Kio industrial property for S$300 million.

The offer was made as VI-Reit has the right of first refusal on the property if Ho Lee were to sell it.

Ho Lee is prepared to sell the property, having received an offer of S$300 million from an unrelated third party.

Having considered the offer, the trust managers concluded that the acquisition of the property would not be in the best interests of VIT given that a major equity fund raising exercise would be required to partially finance the acquisition of the property in order for Viva Industrial Real Estate Investment Trust (VI-Reit) to maintain its gearing ratio at the current level.

VIT trades as a stapled security that is made up of a reit and a separate business trust.

"The acquisition of the Ang Mo Kio property would not be accretive to the distribution per stapled security of VIT if the managers were to undertake such a major equity fund raising exercise," said the managers in a filing to the Singapore Exchange.

"In line with VIT's acquisition growth strategy, the managers will continue to explore opportunities from VIT's sponsors and strategic investors, as well as third parties for the acquisition of industrial properties that meet VIT's investment criteria, so as to achieve long-term growth in distribution and net asset value per stapled security."

VIT units closed unchanged at 94 cents. The announcement was made after market close.