• Property trust expects to offer 6.3% dividend yield next year
  • BHG owns five retail properties in China with 12 in pipeline

BHG Retail REIT, backed by five retail properties in China, rose in its Singapore trading debut after completing the city-state’s biggest initial public offering this year.

The units increased as much as 0.6 percent to 80.5 Singapore cents, trading marginally above the IPO price of 80 Singapore cents. The REIT raised S$394 million ($280 million), after selling more than a third of the offering to cornerstone investors including China Life Insurance Co. and Thai billionaire Chanchai Ruayrungruang.

Before the BHG Retail offering, first-time share sales in Singapore had raised just $171 million this year for the lowest volume in at least a decade, data compiled by Bloomberg show. Manulife U.S. REIT, which was seeking to raise as much as S$569 million, said in July it would delay its IPO because of increased market volatility.

BHG Retail has a pipeline of 12 properties it could acquire in the future and expects to offer a 6.3 percent dividend yield next year, according to its prospectus. Its sponsor Beijing Hualian Department Store Co. currently owns or manages 29 malls with another 14 malls under development.

DBS Group Holdings Ltd. was financial adviser and issue manager for the IPO. China International Capital Corp., Bank of China Ltd., Industrial & Commercial Bank of China Ltd. and United Overseas Bank Ltd. joined the deal as co-managers.

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