SINGAPORE (June 28): Singapore REITs raised $1.35 billion through placements in the first half of this year, that was used mainly for acquisitions.
In general, these acquisitions have been accretive to distribution per unit (DPU).
Among them, Frasers Centrepoint Trust (FCT) and ESR-REIT announced placements and preferential equity offerings in Singapore dollars to acquire Singapore assets.
FCT’s main acquisition is a one-third stake in Waterway Point, a successful suburban mall that is connected to Punggol MRT in an up-and-coming residential area.
Cromwell European REIT (CEREIT) announced on June 21 that it plans to acquire six properties for €246.9 million ($380.6 million) in Paris and Poland.
See: Cromwell European REIT buys 6 properties in France, Poland for $378 mil; launches placement
CEREIT upsized its placement to 326 million units from 228 million units, raising €150 million, up from €100 million.
In May, Manulife US REIT (MUST) completed the acquisition of grade A buildings Centerpointe I & II in Fairfax County, Virginia.
See: Manulife US REIT acquires Virginia asset for US$122 mil; proposes US$94 mil private placement to fund deal
The acquisition was part funded by a placement of 114 million units to raise US$94 million ($127 million).
And on June 13, Lippo Mall Indonesia Retail Trust (LMIRT) announced the issuance of a high-yield bond at a discount to the face value of the bond to attract investors
The high-yield bond issuance is to part pay for Lippo Mall Puri, which LMIRT is acquiring from its sponsor Lippo Karawaci for the equivalent of $354.7 million.
See: Lippo Karawaci secures US$1.01 bil for recapitalisation; sells mall to LMIRT
Bucking the trend though is Frasers Commercial Trust (FCOT) which has turned down an invitation from sponsor Frasers Property Limited (FPL) to acquire a stake in Frasers Tower under a right of first refusal (ROFR) agreement.
See: Frasers Commercial Trust spurns offer to invest in Frasers Tower
Valued at $442.7 million, FCOT’s manager said the proposed investment and terms would not be accretive to its distribution per unit.
With so many equity raising happening at once, have cash call fatigue set in? Are they to the benefit of banks or unitholders? And what should investors do?
Login to read “REITs make placements and accretive acquisitions aplenty but investor fatigue has set in” which appears in Issue 888 (week of July 1) of The Edge Singapore which is out now.
