Singapore-listed ESR-REIT, Viva Industrial in merger talks to boost scale, say sources: Reuters

Singapore-listed ESR-REIT and rival Viva Industrial Trust 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 called off their talks, which sources said were focussed on ESR-REIT buying Sabana REIT.

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.