By P.R. Venkat
SINGAPORE--KBS Realty Advisors LLC, a U.S. real-estate investment firm, and Keppel Capital Holdings have started taking orders for a planned US$448 million Singapore initial public offering of U.S. office assets.
The Newport Beach, Calif.-based company along with the asset-management arm of Singapore conglomerate Keppel Corp. on Wednesday lodged an IPO prospectus with Singapore's central bank to sell 509 million units at US$0.88 each.
Keppel KBS US REIT would have an initial portfolio of 11 U.S. properties, including office buildings in Seattle, Houston, Denver, the prospectus showed.
The company has secured commitments from four investors including Malaysia's Affin Hwang Asset Management Bhd. and Philippines based private investment holding company Hillsboro Capital. These investors have agreed to take units totaling US$216.8 million ahead of the IPO.
The remaining units will be offered to institutional and retail investors.
The company is projecting a 6.8% yield next year.
Singapore is a sought-after destination for REITs in Asia. The country is home to more than 40 REITs with a combined market capitalization of nearly $60 billion. Large and small investors are drawn to their yields, which average 6% to 7%.
If the IPO is successful, the company would be the second Singapore-listed REIT to give investors in the city-state exposure to U.S. commercial properties.
Last year, Canadian insurer Manulife Financial Corp. raised $470 million with a Singapore listing of some of its U.S. office properties under a real-estate investment trust called Manulife US REIT.
Founded in 1992, KBS Realty invests, manages, develops and sells U.S. commercial real estate on behalf of pension funds, sovereign-wealth funds and other institutional investors. As of June 30, the total value of KBS's real estate and real-estate-related investments totaled about $11 billion, according to the company's website. It owns office towers, hotels, apartment complexes and other properties across the U.S.
Write to P.R. Venkat at [email protected]