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Prime US Reit units 1.2 times subscribed ahead of Friday debut, potentially netting it US$346.2m

THE manager of Prime US Reit, KBS US Prime Property Management, has received applications for 1.2 times the number of units originally on offer, netting the Reit about US$346.2 million at a price of US$0.88 per unit if all units are allocated.

It will make its trading debut on the Singapore Exchange (SGX) mainboard at 2pm on Friday.

The Reit 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.

The original offering of 335.2 million units would have raised about US$295 million for the Reit.

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

For the international placement tranche, applications for 351.1 million units were made, versus the original 294.3 million on offer.

Stabilising manager Merrill Lynch (Singapore) has over-alloted an additional 22.7 million units to the placement tranche, bringing the total units offered there to 317 million.

The over-allotment units will be borrowed from substantial shareholder KBS REIT Properties III LLC, which has been allocated 79.5 million units.

However, excluding the over-allotment units and interest from parties under rule 240 of the SGX's listing manual, which includes interested persons, interest received for the Prime US Reit was lower at 0.8 times of offer.

Including the over-allotment units, 127 million units were allocated to rule 240 parties.

Previously, the Reit's offering of 335.2 million units was to be split into 318.4 million to investors outside US, and at least 16.8 million units to Singapore retail investors.

The Singapore public offer was then 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, with the unit price of US$0.88 unchanged from its initial guidance, representing a distribution yield of 7.4 per cent in 2019, and 7.6 per cent in 2020.

It has faced a long road to listing publicly in Singapore, after a long delay from earlier attempts last year. Its manager said it is listing now "because market conditions have somewhat stabilised".