Cache Logistics, a real estate investment trust (REIT), plans to raise up to US$334 million ($466.2 million) in what will be Singapore's biggest IPO so far this year.

Cache, managed by ARA Asset Management (ARAM.SI) and logistics firm CWT Ltd (CWTD.SI), is offering 474.2 million units at $0.84 to $0.88 a share, according to a draft prospectus filed with the Monetary Authority of Singapore. 

 

The offer may be increased to 531 million units, or 84% of the REIT’s capitalisation, a term sheet seen by Reuters showed. 

 

Cache starts its investor roadshow on Monday and its initial public offering is scheduled to be priced on March 30. 

 

Cache’s portfolio currently comprises six logistics properties in Singapore valued at $730 million, but the trust intends to diversify geographically by buying warehouses and distribution centres in other parts of Asia. 

 

Based on rents paid by existing tenants, Cache will provide investors with a dividend yield of 8.70 to 8.96% based on the offer price range. 

 

REITs are funds that invest in property and pay most of the rent to shareholders as dividend to enjoy various tax breaks. They cater to investors who want regular dividends that are higher than the yields on safer government bonds, as well as potential capital gains if property prices increase. 

 

In the case of Cache, most of the funds raised from the IPO would be used to pay the owners of the six properties in the portfolio. 

 

CWT said in a statement last month that the transfer of two of its properties to the REIT would result in a one-time gain of $157.7 million. 

 

Macquarie, Standard Chartered and DBS are the joint coordinators, issue managers, bookrunners and underwriters for the Cache IPO.