Viva Industrial Trust plans to offer a 2014 dividend yield of about 8.8 percent in an initial public offering that will raise as much as S$375 million ($299 million), according to two people with knowledge of the matter.
The trust, which will be backed by three industrial properties in Singapore, started to gauge investor demand for the share sale today, the people said, asking not to be named as the process is private. It plans to start trading on the city-state’s stock exchange by the end of October, they said.
Viva joins Soilbuild Business Space REIT in seeking to attract investors to business parks and industrial properties in Singapore. At its recent share price of 74 Singapore cents, Soilbuild, which raised S$626.7 million in its initial public offering in August, is trading at a 8.1 percent yield based on fiscal 2014 projections. REITs and business trusts made up more than half of the funds raised through Singapore IPOs in the past year, according to data compiled by Bloomberg.
Wilson Ang, the company’s chief executive officer of the trust’s manager, declined to comment when reached on his mobile phone. Ang was previously CEO and co-founder of Cambridge Industrial Trust.
Singapore’s industrial property values rose to a record in the first quarter, before falling 0.6 percent in the three months ended June, according to government data going back to 1993. Rents fell less than 0.1 percent in the second quarter, after rising for the past 3 1/2 years, according to the data.
In July, Viva bought a mixed-used development, UE BizHub East, in Changi Business Park from United Engineers Ltd. for S$518 million. This property in eastern Singapore, together with two other developments in the Tuas and Chai Chee areas in the city-state, will be included in the trust’s holdings, the people said.
Standard Chartered Plc, Bank of America Corp.’s Merrill Lynch unit and HSBC Holdings Plc are working on the share sale, the people said.