Prime US REIT - Applied for small number of IPO shares

Background
Prime US REIT is offering 335,203,200 units (subject to overallocatement option) in its IPO at USD 0.88 (fixed at SGD 1.20 for public offering) per unit, of which the public offering is no less than 16,761,000 units. The offer will close on 15 July 2019 (Monday) at 12pm Singapore Time and they are currently scheduled to list on 19 July 2019 (Friday) at 2pm Singapore Time.

The Portfolio comprises of 11 Freehold Class A Prime U.S. Office Properties spread across the United States.

Distributions
Prime US REIT will make distributions to Unitholders on a semi-annual basis with amount calculated as at 30 June and 31 December each year.

Their distribution policy is to distribute 100% of their Annual Distributable Income for the period from the Listing Date to the end of Projection Year 2020. Thereafter, they will distribute at least 90% of its Annual Distributable Income for each financial year.

The first distribution will be for the period from Listing Date (19 July 2019) to 31 December 2019, and will be paid by the REIT Manager ("Manager") on or before 31 March 2020. The distribution to be paid is forecasted to be 4.87 US cents per unit (or its equivalent amount in SGD) for this period.

Thereafter, subsequent distributions to unitholders will be on a semi-annual basis, with the projected DPU of 6.70 US cents for Projection Year 2020. The Manager will endeavour to pay distributions no later than 90 days after the end of each distribution period.

Blogger Posts
Several prominent bloggers in the community have done extensive research and did write-ups.

1. Dr Wealth
2. Probutterfly
3. Investment Moats
4. Financial Horse
5. Singapore IPO

My subscription to the IPO / Afterthoughts
I took some time to think whether to subscribe to the IPO weighing the gains and risk such as:

• Forex exposure
• Economic conditions specific to the U.S.
• Potential equity fundraising in future for acquisition of new properties
• Opportunity to get it cheaper than subscribing to the IPO a-la Eagle Hospitality Trust

Eventually I decided to go for it, albeit just a small position of 1000 units. Should the application be successful, this will slightly increase my REIT holding. Wish me luck!

Bearing in mind their gearing is at 37%, I do agree there is a likelihood of equity fund raising in the future should they plan to acquire new properties. In the event there is a rights issue when they acquire new properties, I will most definitely be subscribing to it.

With my portfolio updates being on a quarterly basis (Jan-Mar / Apr-Jun / Jul-Sep / Oct-Dec), I am a little late to write for 2Q2019 - do expect the post to be up within the next 2 weeks. Cheers~