Singapore-listed and Warbug Pincus-backed pan-Asia logistics venture ESR-REIT has announced to merge with rival Viva Industrial Trust to create the fourth largest industrial real estate investment trust in the city-state with approximately S$3 billion ($2.23 billion) in assets, according to a filing with the stock exchange.
“Size does matter for REITs. This merger will…create a portfolio that is stronger, more resilient and better diversified.” said ESR-REIT Manager’s CEO and executive director Adrian Chui in the press release.
Following the merger, the combined portfolio will consist of 56 properties with a total gross floor area of 13.6 million sq ft allowing it to capture a larger segment of industrial tenants.
Viva Industrial Trust Manager CEO and executive director Wilson Ang commented: “We will benefit from the support of a strong Pan-Asian developer-sponsor whose financial strength, sizeable asset portfolio and regional presence will allow us to fast-track our growth aspirations.”
The merger via a trust scheme is subject to shareholders’ approval and sanction by the Singapore Court.
“The scheme consideration payable to Viva Industrial Trust stapled security holders is S$0.96 per stapled security on an ex-distribution basis, providing Viva Industrial Trust with an implied equity value of about S$936.7 million. The scheme consideration will be satisfied 10% in cash and 90% through the issuance of new ESR-REIT units,” as per the announcement.
Citigroup Global Markets Singapore Pte. Ltd., RHB Securities Singapore Pte. Ltd. and United Overseas Bank Limited advised ESR-REIT while BofA Merrill Lynch was the sole financial adviser to VIT on the merger.