ESR-REIT preferential offering sees strong demand on excess applications

Singapore two-dollar bills

ESR-REIT’s preferential offering of 98.12 million new units received lukewarm interest for acceptances, but stronger demand for excess applications, leading to demand for 212.5 percent of the units on offer.

Valid acceptances were for 50.44 million new units, or only 51.4 percent of the offering, while excess applications came in at 158.05 million, or 161.1 percent of the offering, ESR-REIT said in a filing to SGX.

The preferential offering was on the basis of 29 new units for every 1,000 existing units, at S$0.51 each, to raise up to around S$50 million, the filing said.

The REIT’s sponsor, ESR Cayman, will have a total interest of 8.78 percent of ESR-REIT after the preferential offering, compared with 8.97 percent previously, as it took up its provisional allotment, but wasn’t allocated any excess new units as the offering was oversubscribed, the filing said.

The new units are expected to be listed on SGX on 14 October, ESR-REIT said.

Combined with the around S$100 million raised in a private placement of 194.17 million new units to institutional and other investors, a total of around S$150 million has been raised from the equity offerings, ESR-REIT said.

In June, the REIT said around S$44.4 million of the equity fund-raising’s proceeds were expected to be used to fund ESR-REIT’s acquisition costs for a property located at 48 Pandan Road in Singapore.

Another S$45.7 million was expected to be used to finance asset enhancements at the 7000 Ang Mo Kio Avenue 5 property in Singapore, and at the UE BizHub EAST property, the REIT had said.

Around S$56.8 million was expected to be used to repay existing indebtedness, with around S$3.1 million earmarked for expenses related to the fund-raising, the REIT had said.

ESR-REIT has a portfolio of 56 industrial properties in Singapore across the business park, high-specs industrial, logistics/warehouse and general industrial segments, the filing said.

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