RETAIL investors will get their chance today to apply for units in Far East Hospitality Trust, Singapore's second-largest initial public offering this year.
The sale of 50 million units to the public follows the successful placement of 267.57 million units to institutional investors.
Interest is strong as the trust, with 11 hotels and serviced residences in Singapore, has extensive exposure to the booming tourism sector here.
Retail investors have until noon on next Thursday to buy units for 93 cents each, the top of an earlier indicated range. Trading is expected to start on Aug 27 at 2pm.
Demand from large investors had exceeded the number of units offered under the placement tranche by about 30 times, said the vehicle's managers, part of developer Far East Organization.
The public tranche of 61.8 million units includes 11.8 million units reserved for the directors, management and employees of the sponsor and the managers.
The trust's properties include Orchard Parade Hotel, Albert Court Village Hotel and Riverside Village Residences.
Based on the offering price, the distribution yield for next year is projected to be 6.3 per cent.
The yield is contributed by a fixed rental component and another component that depends on the performance of the properties.
The trust will list in the form of "stapled securities". Each contains one unit of a real estate investment trust (Reit) and one business trust unit.
The assets will be under the Reit, with the business trust being dormant and only a master lessee of last resort.
Sales to cornerstone investors, institutional investors and the public will raise gross proceeds of about $717.6 million.
"The setting up of Far East Hospitality Trust is a key endeavour in the evolution and transformation of Far East Organization," said the managers.
"The listing will allow the organisation to actively integrate proactive asset management, financial discipline and yield-based performance management, endowing it with a scalable and sustainable business in hospitality."
DBS Bank, Goldman Sachs, HSBC and OCBC Bank are the joint bookrunners and underwriters for the offering.