SINGAPORE (June 28): Prime US REIT has filed its preliminary initial public offering (IPO) prospectus on Friday.

This sets the stage for the third US-based REIT to be listed on the Singapore Exchange after recent offerings by ARA US Hospitality Trust and Eagle Hospitality Trust.

See: Prime US REIT primed for IPO, plans to lodge prospectus on June 28

Although the timing of the offering has not been finalised, Prime US REIT is offering of 335.20 million units priced at US$0.88 each which is expected to raise $294.98 million in gross IPO proceeds.

The initial portfolio of Prime US REIT will consist of 11 office properties located across the US, with a value of US$1.22 billion and an aggregate net lettable area (NLA) of 3.4 million sf.

All the 11 properties in the IPO portfolio are Class A office buildings that come with 100% freehold land tenures.

These are located at Atlanta, Georgia, Washington DC, and Salt Lake City, Utah, among others.

Its top three tenants include Charter Communications Inc, Goldman Sachs Inc, and Sodexo Operations.

As at Jan 1, the occupancy of the IPO portfolio stood at 96.7%.

The portfolio has a long weighted average lease expiration (WALE) of 5.5 years. Lease terms are generally signed for five to 10 years with anchor tenants having agreements for longer than 10 years.

The manager for Prime US REIT is KBS US Prime Property Management, a joint company of KBS Asia Partners, Keppel Capital Two, and Experion Holdings.

KBS REIT Properties III, an indirect wholly-owned subsidiary of KBS REIT III, has entered into an agreement with Prime US REIT to subscribe 228.41 million units.

Cornerstone investors -- including Keppel Capital Investment Holdings, Times Properties  and Hiap Hoe Investment -- will subscribe to 360.25 million units.

The forecast distribution per unit (DPU) yield is expected to increase from 7.4% for the FY19 ending December to 7.6% in FY20.

DBS Bank is the sole financial adviser and issue manager for the offering while Merrill Lynch (Singapore) and DBS are the joint global co-ordinators.

Earlier, ARA US Hospitality Trust raised $498 million in gross proceeds on the SGX while Eagle Hospitality Trust had proposed to raise $565.8 million although less than the half of the 580.6 million units offered were fully subscribed.