Singapore Markets closed

Prime US REIT closes flat at IPO price on trading debut

PC Lee

SINGAPORE (July 19): Prime US REIT closed flat at its first trading session on the Singapore Exchange on Friday.

As at 5pm, the counter was trading at its IPO price of 88 US cents with 10.7 million units traded.

It had opened at 86.5 US cents at 2pm, 1.7% or 1.5 US cents below its IPO price.

See: Prime US REIT launches largest IPO year-to-date; selling units at $1.20 each

Before the market opened on Friday, KBS US Prime Property Management, the REIT’s manager, said it had received applications for 393.4 million units from international investors outside the US and Singapore retail investors, 1.2 times the 335.2 million units offered.

For the Singapore public offer, applications for 42.4 million units were received compared to the 40.9 million units that were on offer.

For the placement tranche, applications for 351.1 million units were received compared to the original 294.3 million on offer.

This led to the over-allotment of another additional 22.7 million units to the placement tranche by stabilising manager Merrill Lynch (Singapore), bringing the total units offered to 317 million.

Originally, 318.4 million of the REIT’s offering of 335.2 million units was to be apportioned to investors outside US with at least 16.8 million units going to Singapore retail investors.

The Singapore public offer was however later raised to 40.9 million units due to “strong demand”.

Prime US REIT is the third US office REIT to list here after Manulife US REIT and Keppel-KBS US REIT. Its IPO price of 88 US cents translates into a distribution yield of 7.4% in 2019 and 7.6% in 2020.

See: Prime US REIT sets out to attract investors with Class A properties, in-built rental escalation, initial 7.4% yield