California-based real estate investment firm KBS Realty Advisers will partner Keppel Capital to raise an estimated $500 million (S$675.5 million) through the listing of a REIT on the Singapore bourse by integrating some of its US office assets.
The Dow Jones Newswire reported that KBS Realty Advisers was reported to be in discussions with Keppel Capital, the asset-management arm of Singapore conglomerate Keppel Corporation, to establish a joint venture (JV) based in Singapore that will be listed as a real estate investment trust (REIT) later this year.
This JV would possess an initial portfolio of close to a dozen properties that includes office properties in Seattle, Houston, Denver and other US cities and reportedly offer an investment yield close to 7 per cent.
Founded in 1992, KBS Realty invests, manages, develops and sells US commercial real estate on behalf of pension funds, sovereign-wealth funds and other institutional investors. As of June 2017, it has investments under management amounting to about $11 billion, according to its website. Its portfolio includes office towers, hotels, apartment complexes and other properties across the US.
Keppel Capital is estimated to have $19 billion worth of assets under management. This includes real estate, infrastructure and data centre assets in various global markets.
The Singapore Exchange (SGX) has emerged as an attractive listing destination for REITs and is currently home to over 40 REITs with an aggregate market capitalisation close to $60 billion, with average yield of 6 to 7 per cent.
If approved, this will be the second Singapore-listed REIT offering exposure US commercial properties, following a $470 million IPO of the Manulife US REIT by Manulife Financial Corp in 2016 that integrates some of its US office properties.
This month, the Cromwell Property Group is expected to list a REIT that include various properties in Europe and will be the first Euro-denominated REIT on the SGX.