U.S. Firm Readies REIT Listing in Singapore -- WSJ

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (September 7, 2017).

SINGAPORE -- KBS Realty Advisors LLC, an American real-estate investment firm, is planning to raise about $500 million via a Singapore initial public offering of some of its U.S. office assets, according to people familiar with the matter.

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The Newport Beach, Calif.-based company is in talks with the asset-management arm of Singapore conglomerate Keppel Corp. to form a joint venture that they plan to list as a real-estate investment trust later this year, the people said.

The new company, based in Singapore, would have an initial portfolio of close to a dozen properties, including office buildings in Seattle, Houston, Denver and other U.S. cities, according to the people familiar with the planned stock offering.

If the IPO goes ahead, 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.

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%.

The KBS-Keppel joint venture company could offer an investment yield of close to 7%, according to people close to the matter, in line with what Manulife US REIT pays.

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 stood at about $11 billion, according to the company's website. It owns office towers, hotels, apartment complexes and other properties all over America.

A spokeswoman for KBS declined to comment. A spokeswoman for Keppel Capital, the asset-management arm of Keppel Corp., declined to comment on the tie-up, but said the company is always on the lookout for opportunities to grow its fund-management business. "We will evaluate all possible growth avenues, and will issue an announcement if there is any material development," she said.

Keppel Capital has about $19 billion worth of assets under management, including real estate, infrastructure and data center assets in various global markets.

Write to P.R. Venkat at venkat.pr@wsj.com and Saurabh Chaturvedi at Saurabh.Chaturvedi@wsj.com

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September 07, 2017 02:47 ET (06:47 GMT)