SINGAPORE (Dec 10): Bloomberg reported on Nov 16 that Ascendas-Singbridge Group was “mulling” a US$500 million ($684 million) IPO of a recently acquired US portfolio. The Edge Singapore understands that Ascendas-Singbridge is looking to raise as much as US$600 million in an IPO, most likely in February 2019, after Manulife US REIT and Keppel-KBS US REIT have announced year-end results. Both real estate investment trusts are likely to test their recently internally restructured REITs to shield distributable income from the new US tax act implemented in December 2017.

The US-based S-REITs have followed certain rules to ensure that unitholders do not have to pay the hefty withholding tax of 30% levied on dividends. Among them are the widely held rule, where no single unitholder holds more than 9.8%, the US portfolio interest-exemption rule, and of course zero tax in Singapore from foreign-sourced income. (Ascendas-Singbridge owns 22.24% of Ascendas India Trust and 19.98% of Ascendas REIT.) A fourth rule, the implementation of a fiscally transparent entity, will be tested for the two US-based S-REITs early next year. If these tests are successful, it could open the door for at least four REIT IPOs with US assets.

On Sept 7, Ascendas-Singbridge announced it had acquired a portfolio of 33 office properties with a net lettable area (NLA) of 3.3 million sq ft in Portland, Raleigh and San Diego. According to the company’s press release, the properties are built on freehold land and are centrally located near major freeways, airports and mass transit, as well as retail outlets and amenities. Tenants include Fortune 500 companies such as Nike and Oracle.

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