SINGAPORE — SPH REIT, the real estate investment trust of Singapore Press Holdings, soared 9 per cent above its initial public offering (IPO) price on its trading debut yesterday, with investors attracted by its assets and returns.

The shares, which began trading at S$0.98 at 2pm, rose to an intraday high of S$1.00 before closing at S$0.985. Close to 122 million units changed hands, making it the top traded REIT by volume.

The strong debut follows a largely successful IPO that raised S$504 million after the units were offered at S$0.90 apiece, the top end of its price range.

The public tranche of nearly 84 million units was 25 times oversubscribed, while the placement tranche was 42 times oversubscribed.

Shares of the REIT, whose initial portfolio comprises Paragon and Clementi Mall, were offered with a yield of 5.79 per cent based on fiscal 2014 projections. That is higher than the measure tracking REITs in Singapore, which trades with a yield of 4.76 per cent, according to Bloomberg data.

“Paragon is a well-known mall in Singapore so that’s a pulling factor. Even with the downturn and uncertainties, retail REITs have been quite defensive, so that’s part of what makes SPH REIT attractive,” Maybank Kim Eng analyst Ong Kian Lin said.

SPH REIT’s performance is an indication of how the overall REIT market in Singapore has held up well despite the recent sell-down over worries that the United States might start scaling back its stimulus measures, which could cause interest rates to rise.

The FTSE ST Real Estate Investment Trusts Index plunged 18.7 per cent to its lowest level this year on June 25, slightly more than a month after climbing to a year’s high on May 15. The index has since recovered from its year’s low, but it is still 13.4 per cent below its 2013 high.

Further evidence REITs remain a popular investment choice is Overseas Union Enterprise’s (OUE) REIT, whose public offering was also oversubscribed. Its placement tranche of about 383 million units was fully taken up, while the 51 million units offered to the public was 19.1 times subscribed.

OUE Hospitality Trust, comprising the five-star Mandarin Orchard hotel and adjoining Mandarin Gallery mall, will commence trading today.

Despite the strong demand for both REITs, Mr Ong cautioned that there is lingering volatility in the market due to uncertainties over when the US might start tapering its stimulus programme.

“All REITs got hit after Bernanke’s comment … Industrial REITs corrected the most. The average daily trading value hasn’t been very fantastic since, so investors are now more cautious about parking their funds in REITs,” he said.