A-REIT announced private placement of 178 million in September 2018 for new units at $2.54 a piece to raise $452.1 million of proceeds to partly fund the second acquisition in UK and also to fund the development of new built-to-suit (BTS) property in Singapore. Some of the new financing will be used to pare down debt as well.
According to pro forma figures, management expects the acquisitions to lift the distribution per unit (DPU) .
22nd September 2018
Last Friday we have witnessed a wide Bearish bar down 4 cents to close at 2.56 , couple with High volume this is rather bearish.
Short term wise, I think it may likely retest 2.54 then 2.49 with extension to 2.45 level.
Not a call to buy or sell.
Pls dyodd.
Based on A-REIT's own announcement on their rationale for the private placement, it was meant to raise funds for acquisition of a UK portfolio of 12 properties which A-REIT thinks will increase long term distributions for unitholders. The funds raised from private placement was also to be used for a built to suit property development, for repayment of some debts, for reducing their gearing, for setting aside some cash for future acquisitions and also to increase trading liquidity of it's units. It seems that A-REIT has good rationale for doing this private placement.
I provide a link below for further read on A-REIT's recent private placement.
Let us see below. Over the past 9 years, A-REIT has grown it's revenue at a CAGR of 9.02%. It has grown it's net property income at a CAGR of 8.72%. It has grown it's distributions to unitholders at a CAGR of 9.27%. It has grown it's value of investment properties at a CAGR of 9.63%.
"Hot stock: Ascendas Reit units down 2.6% after manager prices S$452m placement at S$2.54 per unit" by The Business Times https://www.businesstimes.com.sg/companies-markets/hot-stock-ascendas-reit-units-down-26-after-manager-prices-s452m-placement-at-s254
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