Comparing Keppel-KBS US Reit with Manulife US Reit

Opening date for IPO of Keppel-KBS US Reit will is on 2 Nov 2017 and will close on 12pm 7 Nov 2017. This IPO is Singapore largest since July 2017, when Netlink Trust was launched. Cornerstone investors include Affin Hwang Asset Management. Looks impressive, but lets take a closer look.

For simplicity, lets compare with an existing US Reit that is already listed in SGX, Manulife US Reit. Both are office Reits of similar sizes and property class types.

Keppel-KBS (first) vs Manulife (second)

  • Yield : 6.8%-7.2% vs 7.4%
  • Gearing : 36% vs 30%
  • Price /NAV : 1.05 vs 1.10
  • Occupancy : 88.1% vs 95.8%
  • WALE (Weighted Average Lease Expiry) : 3.7% vs 5.7%
  • WADM (Weighted Average Debt Maturity) : 4.5% vs 3.9%

And Manulife US Reit can also claim that DBS Bank owns 5.5% of it.

I think Keppel-KBS is taking profit with this IPO launch. US Manulife is a better buy.


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