SINGAPORE (Nov 2): Keppel-KBS US REIT has launched its US$553.1 million ($752 million) initial public offering, giving investors exposure to the US office real estate sector.

The REIT is offering 34 million units priced at US 88 cents each, as well as placement tranche of 228 million units. There is also an overallotment option of 31.4 million units.

The public offer will close at 12 noon next Tuesday Nov 7, with the units expected to start trading on the Singapore Exchange at 2pm, Nov 9.

The projected distribution yield for the REIT for forecast year 2018 ending 31 Dec is 6.8%, with a yield growth of 5.8% projected for forecast year 2019 ending 31 Dec, presenting a 12.6% total return.

Keppel Capital will hold a 9.5% stake in the REIT after the offering, and KBS will also hold a 9.5% stake. None of the sponsors will be a controlling unitholder of the Kepple-KBS US REIT.

The REIT aims to distribute 90% of its annual distributable income on a semi-annual basis, however the level of distribution will be determined at the manager’s discretion.

Proceeds from the IPO will be used to fund acquisitions of properties, the transaction costs and working capital for the REIT.

“The potential listing of Keppel-KBS US REIT is part of Keppel’s aim to grow our fund management business and expand our geographic footprint into the stable US market, capitalising on the growing demand by global investors for attractive US real estate investments. The REIT will be able to draw on Keppel Capital’s expertise in the management of listed REITs and strong relationships with Asian investors, as well as KBS’ established investment and asset management experience in US commercial real estate,” said Christina Tan, chief executive officer, Keppel Capital in a statement.