Ascendas REIT raises S$452.1 million in private placement at low end of price band

Ascendas REIT raised around S$452.1 million in a private placement of 178.0 million new units priced at S$2.54 each, at the low end of the S$2.528 to S$2.606 proposed pricing range, its manager said in a filing to SGX before the market open on Friday.

The private placement, which was initially announced on Thursday after the market close, was around 2.2 times covered, with strong demand from new and existing institutional, accredited and other investors, it said.

The S$2.54 per unit price, which was set after an accelerated book-building process, was a discount of 3.5 percent to the adjusted volume weighted average price of S$2.6322 a unit on Thursday, which was the market day on which the placement agreement was signed, it said. The price was adjusted to subtract the advanced distribution of around 7.25 Singapore cents a unit, which is an estimated amount, it said.

The issue price was a  25.1 percent premium to the adjusted net asset value per unit, or NAV less estimated distributions, based on Ascendas REIT’s financial results for the April-to-June quarter, the REIT manager said.

The new units are expected to start trading at 9:00 A.M. SGT on 18 September, the filing said.

DBS Treasury Investments was allocated 15 million new unites under the placement, it said.

Around 55.3 percent of the gross proceeds, or around S$250.0 million, is earmarked to partially fund the acquisition of a second U.K. logistics portfolio, Ascendas REIT’s manager said.

The first portfolio was announced in late July, when Ascendas REIT said it would buy 12 U.K. logistics properties for 207.27 million pounds to expand its geographical footprint beyond Asia and Australia; the transaction was completed in mid-August.

Around S$109.0 million, or 24.1 percent of the gross placement proceeds, is expected to partially fund the development of a build-to-suit facility in Singapore, subject to completion of negotiations, it said.

Another around S$88.9 million, or 19.7 percent of the gross proceeds, is earmarked for funding debt repayment and future acquisitions, the REIT’s manager said.

Around S$4.2 million, or 0.9 percent of the gross proceeds, will be used to pay the estimated fees and expenses of the placement, with any balance to be used for general corporate and/or working capital purposes, it said.

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