Singapore-listed industrial landlord Ascendas REIT (A-REIT)(SGX:A17U) has announced its intention to carry out a placement of 140 million new units at an issue price of between S$2.50 and S$2.55. The placement is to raise gross proceeds of at least S$350 million for the purpose of new property acquisitions in Singapore.

The placement will be used in the acquisition of two top tier assets which would further enhance the quality of A-REIT’s portfolio and improve distributable income.

Out of the projected S$350 million raised, S$126 million is expected to be used to fund the potential acquisition of a property located within Singapore Science Park II that is described to be easily accessible through Pasir Panjang Road and the nearby Haw Par Villa MRT station.

Approximately S$210 million will be used to partly fund the potential acquisition of an integrated industrial mixed use property at Kallang Avenue described as being in close proximity to the Lavender MRT station and fringes of the CBD.

The remaining S$5.4 million will be used to pay the estimated fees and expenses that will be incurred from the above acquisitions.

The issue price range of between S$2.50 and S$2.55 per new unit represents a discount of between 3.1 per cent and 5 per cent to the volume weighted average price of S$2.63 per unit in A-REIT at the close of the market on the 7 March 2013.

Final price of the placement is expected to be announced soon. The placement will be managed by Citigroup Global Markets Singapore Pte. Ltd. and DBS Bank Ltd.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.