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It’s confirmed.
The value tag?
Round S$454 million.
That is going to extend the REIT’s portfolio worth by greater than 26%.
As a very long time investor of AIMS APAC REIT, I like the acquisition for the next causes:
1. The asset will improve the variety of freehold belongings held by the REIT.
2. The acquisition will improve earnings visibility as there’s a 10 years lease to Woolworths with annual rental escalation of two.75%.
3. There may be room to construct extra rentable area because the asset’s plot ratio has but to be maxed out which can enable for extra natural development sooner or later (and that is most likely a giant push for the REIT to make the acquisition if we take a look at their commendable report in maxing out plot ratios of a few of their belongings in Singapore.)
4. The acquisition is prone to be DPU accretive as a result of it’s going to be 60% financed by debt (which is prone to be competitively priced given the present low rate of interest atmosphere) and internet proceeds raised from the latest S$250 million in perpetual bond subject may even be utilized.
A query on many unit holders’ minds might be will there be a rights subject?
The REIT supervisor has stated that they may subject new fairness.
Personally, I believe that it’s a forgone conclusion as a result of once we evaluate the worth tag of S$454 million and what we all know in level quantity 4 above, there’s a shortfall of some tens of hundreds of thousands of {dollars}.
Fairness issuance may take the type of personal share placements or a rights subject, in fact.
As a very long time unit holder, I hope that any fairness fund elevating goes to be a rights subject.
That is in order that I can improve my funding within the REIT most likely at a reduced value.
In spite of everything, I by no means get invited to participate in personal placements.
I suppose I’ll simply have to attend and see.
Woolworths’ Full 12 months Outcome 26 Aug 21: Woolworths’ earnings led larger by Australian Meals enterprise.
References:
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