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Singapore Property News

Soilbuild aims to raise $643m with Reit offer

Most of the proceeds will pay for trust's business properties

Posted on 31-Jul-2013
By: Rachel Scully

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Soilbuild aims to raise $643m with Reit offer

PROPERTY group Soilbuild Group Holdings is looking to raise up to $642.8 million in gross proceeds by spinning off seven business properties into a trust.

Most of the funds raised will go to paying for the properties making up the real estate investment trust (Reit).

After months of anticipation, the company lodged the preliminary prospectus for its industrial Reit with the Monetary Authority of Singapore yesterday.

The builder and developer of residential and industrial property will offer 586.5 million units for sale as part of the Reit's initial public offering, at a price range of 77 cents to 80 cents per unit.

The projected distribution per unit will mean yields ranging between 7.5 per cent and 7.8 per cent for next year, it said.

The offering consists of an international placement of 499 million units to investors, including institutional and other large investors in Singapore.

Another 87.5 million units will be offered to the public, including 25 million units reserved for subscription by the directors, management, employees and business associates of the Reit's sponsor, Soilbuild Group Holdings.

Any of the reserved units not taken up will be made available to meet any excess demand for the public share offer.

Separately, Soilbuild co-founder and managing director Lim Chap Huat has agreed to subscribe to 216.9 million units. This is not part of the proposed IPO.

Soilbuild's Reit will have an initial portfolio of seven properties.

Two are business park developments Eightrium @ Changi Business Park and Solaris in Fusionopolis. The other five industrial properties are Tuas Connection, West Park BizCentral in Pioneer Crescent, NK Ingredients, COS Printers as well as Beng Kuang Marine.

The IPO portfolio has an aggregate gross floor area (GFA) of 3.23 million sq ft and net lettable area of 2.96 million sq ft as at June 30.

The Reit manager will receive a fee of 10 per cent of the annual distributable income, and may also earn a performance fee.

The Reit is the second listing Soilbuild is seeking this year.

Its construction arm was listed on the mainboard in May.

Recent Reits and property trusts successfully listed on the Singapore Exchange this year include OUE Hospitality Trust, SPH Reit and Croesus Retail Trust.

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