* IPO set to be priced at $0.83/unit, top of expectations
* REIT to buy three office buildings in United States
* Manulife REIT to take $296 mln loan to buy buildings (Adds Singapore IPO activity, cornerstone investors, use of proceeds)
HONG KONG, May 11 (Reuters) - Manulife US REIT is set to price its Singapore initial public offering at the top of expectations, IFR reported on Wednesday, helping to revive new listings there with a $519.2 million deal, the biggest in almost two years.
The real estate investment trust (REIT) offered 625.52 million units that are slated to be priced at $0.83 each, Thomson Reuters publication IFR reported, citing a source close to the transaction.
At that price, the REIT forecast a distribution yield of 6.6 percent in 2016 and 7.1 percent in 2017, according to its IPO prospectus.
The REIT is Singapore’s biggest since the $611 million listing of Accordia Golf Trust in July 2014. Companies have raised just $34.2 million from IPOs in Singapore so far in 2016, after the weakest year for listings in 17 years in 2015 with $432.6 million worth of deals, according to Thomson Reuters data.
Cornerstone investors, including Credit Suisse AG, DBS Bank, Fortress Capital Asset Management and the sovereign wealth fund for Oman, agreed to buy 169.5 million of the REIT’s units. Manulife International Ltd, a unit of Canada’s biggest life insurer Manulife Financial Corp, also agreed to buy 59.4 million units, with the remainder sold in a public offering.
Manulife US Real Estate Management Pte Ltd, which will manage the REIT, plans to use proceeds from the IPO to fund the acquisition of three office buildings, two in the Los Angeles area and one in Atlanta, worth $771.4 million, according to the IPO prospectus. In conjunction with the listing, the REIT will also raise $296 million from a loan with John Hancock Life Insurance Co (USA) to finance the purchase of the properties.
The two-year loan pays a fixed interest rate of 2.8 percent, the prospectus showed.
DBS was hired as sole financial adviser on the IPO, with China International Capital Corp (CICC), Credit Suisse and Deutsche bank also acting as joint bookrunners on the deal. (Reporting by S. Anuradha of IFR; Writing by Elzio Barreto; Editing by Muralikumar Anantharaman/Ruth Pitchford)