Soilbuild to offer Reit at 77-80 cents a unit
By
ong chor hao
ANOTHER real estate investment trust (Reit) listing is in the works, with Soilbuild Business Space Reit (Soilbuild Reit) filing its initial prospectus yesterday.
The business park and industrial property-focused trust will sell 586.5 million units to institutional and public investors at between 77 cents and 80 cents each.
This is subject to an overallotment option of 56.3 million units.
Depending on the final price set, distribution yield is projected at between 7.3 per cent and 7.6 per cent this year on an annualised basis, and between 7.5 per cent and 7.8 per cent for the next year.
Some 499 million units in the offering will be allocated to the placement tranche.
The remaining 87.5 million units will be for retail investors, but 25 million units in this tranche have been set aside for the directors, management, employees and business associates of the sponsor, Soilbuild Group Holdings.
Separately, Lim Chap Huat, the managing director at Soilbuild Group, has agreed to subscribe for 216.9 million units at the offering price.
The offering and subscription by him will help to raise between $618.7 million and $642.8 million, subject to the final unit price.
The Reit will draw down on a $280 million debt facility and utilise $22.1 million cash in security deposits from tenants and lessees to raise total cash proceeds of up to $944.9 million.
The funds will be used mainly to pay for four properties not currently owned by the Reit; another $84.8 million will be used to repay existing debt, while the rest will go into covering transaction costs and working capital.
Soilbuild Reit will have seven properties in its initial portfolio, comprising two business park assets and five industrial properties. Remaining leases on the assets range from about 29 to 55 years.
It will have a right of first refusal to all the sponsor's income-generating business park-related assets in Singapore. Currently, four such properties have been identified, which could increase total gross floor area by 72.2 per cent to 5.9 million square feet.
The trust manager, SB Reit Management, will be led by CEO Shane Hagan, who was previously chief financial officer at Mapletree Commercial Trust Management, the manager for Mapletree Commercial Trust.
