KBS Realty Advisors has priced the initial public offering of Prime US Reit at US$0.88 per unit to deliver a forecasted dividend yield of 7.4 per cent in 2019, with a reduced deal size.
Cornerstone investors include Keppel Capital, Singapore Press Holdings , Hiap Hoe Investment and AT Investments, which is linked to India-born Singapore billionaire Arvind Tiku.Keppel Capital and SPH have each committed US$55 million for a 6.8 per cent stake in Prime US Reit. AT Investments has committed US$65 million for an 8 per cent stake.Keppel Capital will take a 30 per cent stake in the Reit manager, KBS US Prime Property Management, while AT Capital will take a 10 per cent stake.
Portfolio occupancy was 96.7 per cent as at Jan 1, with a weighted average lease expiry of 5.5 years by net lettable area. The tenant base has largest representations from the finance, legal and communications industries.Some 98.3 per cent of contracted leases as at Jan 1, based on cash rental income for the month of January, have built-in rental escalation clauses, the issuer said.
"However, investor fatigue due to the recent listings of two US hospitality Reits and the ongoing escalation in US-China trade tensions might act as potential dampeners," he said.