Prime US REIT private placement prices near top of band amid strong demand

U.S. one-dollar currency notes; taken September 2018.U.S. one dollar bills.

Prime US REIT has priced its private placement at US$0.81 a unit, near the top of the US$0.797 and US$0.822 indicative range, in an offering that was two times subscribed, suggesting strong demand, the REIT said in a filing to SGX Friday.

The offering raised US$80 million, which is earmarked to partially fund the proposed acquisitions of two properties, one in California and one in Florida, the filing said.

The issue price was a 3.4 percent discount to the adjusted volume weighted average price of US$0.8385 a unit for trades on Wednesday.

“The strong demand and support shown to the private placement is a testament to the market’s confidence in PRIME’s investment case and value proposition,” Barbara Cambon, CEO and chief investment officer of the REIT’s manager, said in the statement. “Overall, the acquisitions add visibility to our organic growth prospects and will enhance the returns that we continue to deliver to all stakeholders for the long-term, in a disciplined and prudent manner.”

The REIT said the offering saw strong demand from existing unitholders and new investors, with a “a good mix of long-only institutional investors, multi-strategy funds, family offices, and private wealth clients. Institutional investors accounted for over half the demand and final allocations, accompanied by strong private wealth and family office interest.”

DBS Bank and Credit Suisse (Singapore) were joint lead managers and underwriters for the offering.

The REIT’s units were trading at US$0.855 at 9:07 a.m. after the lifting of the trading halt.