Ascendas REIT - OCBC Investment 2016-08-02: Launch of private placement to raise ~S$155m

Ascendas REIT - OCBC Investment 2016-08-02: Launch of private placement to raise ~S$155m Ascendas REIT ASCENDAS REAL ESTATE INV TRUST A17U.SI 

Ascendas REIT - Launch of private placement to raise ~S$155m

  • Ascendas REIT (A-REIT) announced that it has launched a private placement of 64m new units at an issue price of S$2.417 per new unit, which comes in at the higher end of its indicative price range of S$2.344 – S$2.417 announced last evening. This represents a discount of 4.1% versus its last closing price of S$2.52. As a result, A-REIT will raise gross proceeds of S$154.7m. 
  • The private placement was over six times covered. 
  • Management intends to use 
    1. ~S$112.1m of the gross proceeds to partially fund two potential acquisitions in Australia (one business park in Sydney and one logistics property in Melbourne) in which it is still in the process of conducting due diligence, 
    2. ~S$40.0m to fund an AEI of a Hi-Specs property to convert it from a multi-tenanted building to a single-tenanted building in order to secure a MNC tenant, and 
    3. ~S$2.6m to pay the fees in connection with the private placement. 
  • Based on our back-of-the-envelope calculation, we estimate that the proposed transactions would result in a slight accretion of 0.2% to our FY17 pro forma DPU forecast. 
  • Pending more details, we maintain our BUY rating and S$2.66 fair value on A-REIT.




Wong Teck Ching Andy CFA OCBC Securities | http://www.ocbcresearch.com/ 2016-08-02
OCBC Securities SGX Stock Analyst Report BUY MAINTAIN BUY 2.66 Same 2.66


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