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SPH REIT Said to Raise $400 Million in Initial Public Offering

Singapore Press Holdings Ltd., the newspaper publisher that owns the Paragon mall along the city’s shopping belt, raised S$504 million ($400 million) in an initial public offering of its retail assets, according to two people with knowledge of the matter.

SPH REIT sold 559.9 million units at 90 Singapore cents, the high end of a marketed range of 85 Singapore cents to 90 Singapore cents, the people said, asking not to be named as the information is private. The sale can be increased by as much as 56 million units, according to a prospectus filed last week.

The real estate investment trust is competing for investors with an offering by property company Overseas Union Enterprise Ltd. that includes a downtown Singapore hotel and mall. With investors seeking high-yielding assets, trusts have been the most active fundraisers in Singapore in the past year.

At 90 cents a unit, SPH REIT is offering a yield of 5.79 percent based on fiscal 2014 projections, according to the prospectus. The company had commitments from investors including Great Eastern Life Assurance Co. and Morgan Stanley Investment Management Co. for nearly half the shares sold, it said in the document.

Singapore Press said in an e-mail that it's unable to comment on the REIT's pricing.

Overseas Union, which is seeking as much as S$614 million for its REIT, will offer a yield of as much as 7.5 percent based on earnings projections for 2014, it said last week. The FTSE Strait Times RE Invest Trust Index, tracking 28 REITs in Singapore, offers a 4.8 percent dividend yield.

Overseas Union plans to set a price for its sale this week.

Singapore Press said in May it will hold about 70 percent of the REIT after it goes public, and the proceeds will fund the group’s growth and a special dividend.

Credit Suisse Group AG, DBS Group Holdings Ltd. and Oversea-Chinese Banking Corp. managed the sale.

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