(Updates with IPO details, background)

SINGAPORE, May 8 (Reuters) - Indiabulls Properties Investment Trust is planning to raise $235 million in an initial public offering in Singapore, a source briefed on the deal said on Thursday.

The IPO would be the first for a real estate investment trust in half a year since the market went cold in November.

The trust, which is sponsored by India's fourth-largest developer by market value Indiabulls Real Estates <INRL.BO>, filed its prospectus on Thursday and plans to price the IPO on May 26, a second banking source said.

Deutsche Bank <DBKGn.DE> and Merrill Lynch <MER.N> are handling the deal, which will see Indiabulls inject into the trust two freehold projects with 3.4 million square feet of space, to be constructed by August 2008.

The properties, One Indiabulls Centre and Elphinstone Mills, are located in Mumbai and designed to be occupied by IT and financial firms, retail outlets, and a residential component for One Indiabulls Centre, the trust said in the prospectus.

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 market debuts and are now trading as much as 30 percent below their IPO price.

The poor market conditions sparked by the U.S. subprime and 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.

(Reporting by Saeed Azhar and Daryl Loo, editing by Neil Chatterjee) (([email protected]; +65 6403 5669; Reuters Messaging: [email protected])) Keywords: INDIABULLSTRUST/