UPDATE 1-Indiabulls Trust plans $287 mln in S'pore IPO-source

(Updates with project yield, background)

By Saeed Azhar

SINGAPORE, May 26 (Reuters) - Indiabulls Properties Investment Trust plans to offer shares within a S$1-S$1.10 price range, to raise up to S$389 million ($287 million) in a Singapore listing, a source briefed on the deal said on Monday.

The projected yield for the trust, sponsored by India's fourth-largest developer by market value Indiabulls Real Estates (INRL.BO), is 4.66-5.12 percent based on forecast income for the year ending March 2009, the source told Reuters.

The group will sell 353.5 million share in the initial public offering, which would be the first test of investors' appetite for new listing of a real estate investment trust (REIT) since the market went cold in November.

Sources had told Reuters earlier this month that Indian developer DLF Ltd (DLF.BO) would revive and enlarge an IPO of its property trust in Singapore to raise over $2 billion, likely in June, because it believes market conditions have improved.

However, ratings agency Moody's only last week had issued a negative outlook rating for Singapore's REITs over the next 12-18 months, citing weak market sentiment and tighter market liquidity that have impaired their access to capital markets.

Deutsche Bank (DBKGn.DE) and Merrill Lynch MER.N are handling the deal, which will see Indiabulls inject into the trust two projects with a total of 3.4 million square feet of space, said its prospectus filed earlier this month.

The Mumbai properties, One Indiabulls Centre and Elphinstone Mills, due to be ready by August, are designed for IT and financial firms and retail outlets, and has residential components.

The last two REITs to list in Singapore, Lippo-Mapletree Indonesia Retail Trust (LMRT.SI) on Nov 19 and Saizen REIT (SZNR.SI) on Nov 9, tanked on their debuts and are still trading as much as 31 percent below their IPO price.

The poor market conditions sparked by the U.S. subprime credit crisis had caused Indiabulls, and fellow Indian developers Unitech (UNTE.BO) and DLF (DLF.BO), to postpone their planned Singapore REIT IPOs in March.

Analysts say the credit turmoil may force Singapore's once-booming REIT sector -- which has 20 listed property trusts -- to consolidate in coming months as financially weaker players sell assets or merge with their counterparts. (Writing by Daryl Loo; Editing by Ovais Subhani)