With the proposed merger of ESR-Reit and Viva Industrial Trust (VIT) to create Singapore’s fourth-largest industrial Reit, more mergers and acquisitions (M&As) in the industrial Reit space could be on the way, say analysts. This marriage – creating a combined S$33 billion in assets – could become the first in the history of S-Reits. If it goes through, it will happen by way of a trust scheme of arrangement, under which ESR-Reit’s manager will become the manager of the enlarged trust; VIT will be de-listed from the Singapore bourse. The move raises questions of whether private equity firm Warburg Pincus, which owns e-Shang Redwood (ESR), will continue to build up its presence in S-Reits, with Reit investor Tong Jinquan as a potentially ally. The Chinese property tycoon is a substantial unitholder in both Reits that are planning to merge. If the merger is successful, he would own 33.8 per cent of the enlarged trust structure. But even if it doesn’t come to pass, other small industrial Reits could look to it as a case study for their own potential mergers.... Continue Reading