Ascendas REIT launches rights issue to raise S$1.31 billion

A business park property in San Diego, California, U.S., to be acquired by Ascendas REIT. Credit: Ascendas REITA business park property in San Diego, California, U.S., to be acquired by Ascendas REIT. Credit: Ascendas REIT

Ascendas REIT has launched a rights issue of 498.04 million new units to raise gross proceeds of around S$1.31 billion to finance the proposed acquisition of 30 business park properties, the REIT said in a filing to SGX Friday.

The offering will be on the basis of 16 rights units for every 100 existing units of Ascendas REIT, the filing said.

The rights units are priced at S$2.63 each, or an around 17 percent discount to the closing price of S$3.17 on Thursday, the REIT said.

The REIT plans to use S$1.29 billion of the proceeds to partially fund its proposed acquisition of 28 U.S. business park properties in the U.S. and two in Singapore for S$1.66 billion from CapitaLand.

The rights issue may help increase the REIT’s market capitalization, potentially improving trading liquidity of the units, the filing said.

“The manager believes that the increased market capitalisation and liquidity would provide Ascendas Reit with increased visibility within the investment community,” it added.

CapitaLand (BP&C), which is the REIT’s sponsor, and Ascendas Funds Management (S) have agreed to take up their provision of rights in the offering, the filing said. The two parties own a total 19 percent stake in Ascendas REIT, the filing said.

DBS Bank and J.P. Morgan (S.E.A.) were appointed joint lead managers and underwriters for the rights issue, the filing said.

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