Viva Trust to Raise S$365 Million Through Singapore Share Sale

Viva Industrial Trust, a Singapore business and real estate trust, said it will raise S$365 million ($293 million) through a share sale to Chinese property tycoon Tong Jinquan and the public.

Tong, the chairman of Shanghai Summit Property Development Ltd., will purchase S$200 million of shares in Viva Industrial as a cornerstone investor, the trust said in a filing to the Monetary Authority of Singapore today. Viva Industrial will sell 468 million shares at 78 Singapore cents each in the island-state, according to the filing.

Tong, with a net worth of $2.3 billion according to the Hurun Research Institute, was an investor in Perennial China Retail Trust’s IPO in May 2011. He sold his stake almost a year later to investors including Wilmar International Ltd. co-founders Kuok Khoon Hong and Martua Sitorus for an undisclosed price.

REITs and business trusts were the biggest fundraisers in Singapore’s IPO market in the past year, according to data compiled by Bloomberg. The FTSE Strait Times Real Estate Investment Trust Index, comprising 32 trusts, has declined 6.5 percent this year after gaining 37 percent in 2012.

Viva Industrial forecast a dividend yield of 8.8 percent for 2014, according to the filing. The trust will be backed by three industrial properties in Singapore, the filing showed.

Cornerstone investors receive guaranteed allocation of shares in IPOs. By the time Tong, 58, sold his Perennial China holding, the shares had fallen almost 30 percent from their IPO price of 70 Singapore cents. The trust closed at 53.50 cents in Singapore trading today.

Perennial China bought a 50 percent stake in Chengdu Longemont Shopping Mall Development from Tong and his companies for 2.28 billion yuan ($376 million) in 2011.

Tong’s ranking among China’s richest people fell to 72nd this year from No. 22 the year before, when he was worth $3.5 billion, according to Hurun. Shanghai Summit is closely held.

Standard Chartered Plc, Bank of America Corp. and HSBC Holdings Plc are arranging the share sale.

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