BHG Retail REIT completes IPO despite doubts over inflated yield

It will start trading on Friday.

BHG Retail REIT, the SGX's first pure-play China real estate investment trust sponsored by a China-based group, has completed its IPO despite doubts over its inflated dividend yield.

The REIT has raised $120.94 million by offering 151.2 million units to institutional and retail investors.

The REIT also secured $134.9m from four cornerstone investors.

Although the REIT offers good exposure to China's booming retail scene, analysts are wary over its dividend yield.

BHG REIT has a forecasted distribution yield of 5.7% and 6.3% for 2015 and 2016, but these figures are supported by its strategic investors' agreement to forego some of its share of distributions from the REIT until 2020.

Without this support, the REIT's distribution yield for 2015 and 2016 will be just 4% and 4.5%, respectively.