Singapore-listed ESR-REIT, Viva Industrial in merger talks to boost scale- sources (updated)

Alpha Integrated Real Estate Investment Trust

26/01/2018 09:08

* Both companies have total market value of $1.27 bln 
    * Merger would mark first consolidation in mid-cap sector 
    * ESR unit called off talks with rival unit last year 
    * ESR keen to tap its scale and deep funding - sources 
    * Industrial REITs faces challenging environment 
 
 (Adds details on ESR, industrial REITS sector) 
    By Anshuman Daga 
    SINGAPORE, Jan 26 (Reuters) - Singapore-listed ESR-REIT 
 ESSR.SI  and rival Viva Industrial Trust  VIVA.SI  are in 
advanced merger talks aimed at boosting scale for both companies 
in a tough operating environment for the industry, sources 
familiar with the matter said on Friday. 
    The merger, if finalised, would mark the first consolidation 
among Singapore's crowded mid-cap industrial trusts that have 
found difficult to grow over the past few years, analysts said. 
    Sources say Asian logistics developer e-Shang Redwood (ESR) 
- which is backed by private equity firm Warburg Pincus and is 
one of Asia's biggest owners of logistics properties - is keen 
to spearhead a consolidation among Singapore real estate trusts 
by taking advantage of its scale and deep funding. 
    ESR-REIT, backed by ESR, is currently valued at S$744 
million ($570 million) and Viva has a market value of S$917 
million ($702 million).  
    The property portfolio of both companies comprises general 
industrial, logistics, warehouses and business parks. 
    The sources declined to be named as the merger talks were 
private. One source said talks between ESR-REIT and Viva have 
been going on for a few months.  
    In November, ESR Funds Management (S) Ltd, the manager of 
ESR-REIT, and Sabana Shariah Compliant Industrial REIT  SABA.SI  
called off their talks, which sources said were focussed on 
ESR-REIT buying Sabana REIT.  urn:newsml:reuters.com:*:nL3N1NV07F 
    Trading in units of ESR-REIT and Viva was halted on Friday 
ahead of an announcement. 
    ESR-REIT, Viva, Warburg Pincus and ESR declined to comment 
on the merger talks. 
    Bloomberg first reported the talks. 
 ($1 = 1.3072 Singapore dollars) 
 
 (Reporting by Anshuman Daga; Editing by Himani Sarkar) 
 ((anshuman.daga@tr.com; +65 64035676; Reuters Messaging: 
anshuman.daga.thomsonreuters.com@reuters.net)) 
 
Keywords: ESR REIT M&A/