United Engineers plans S$518 mln sale of UE BizHub East to Viva Industrial REIT

SINGAPORE – Singapore listed United Engineers said Thursday that it plans to sell a mixed-use industrial development to the proposed Viva Industrial Real-Estate Investment Trust for S$518 million, the Dow Jones news agency reported.

The property, engineering and construction conglomerate said its property unit has signed a conditional agreement to sell UE BizHub East -- comprising two business-park buildings, a 251-room hotel and a convention center -- to Viva Industrial Trust Management, the manager of the proposed REIT.

If the sale goes through, United Engineers would get the right to subscribe to 5 per cent of stapled securities to be sold by Viva Industrial REIT in its planned initial public offering. The conglomerate would also be granted the right to subscribe for a 10 per cent stake in the REIT’s managers.

United Engineers said it would also be named as property manager for UE BizHub East for a five-year term after the sale and be granted a lease to operate the hotel in the development.

United Engineers expects to pocket S$86.7 million in net post-tax gains from the sale.

The deal is subject to conditions including the successful listing of the proposed Viva Industrial REIT. United Engineers did not specify when the REIT’s IPO might take place.