Arena REIT's The Gums Salisbury. (Photo: SACARE)

Arena REIT is undertaking a fully underwritten AUD50 million institutional placement at an issue price of AUD2.28 per new unit.

The REIT will also offer a non-underwritten security purchase plan (SPP) to eligible unit holders to raise up to AUD10 million.

Proceeds of the equity raising will be used by Arena REIT to provide capacity to pursue further social infrastructure property investments.

Correspondingly, AREA REIT has also provided FY20 distribution guidance of between 13.9 to 14.0 cents per security.

This represents an increase of between 3.0% and 3.7% compared to what was paid out in FY2019.

Post placement, Arena REIT's pro forma 31 December 2019 gearing will reduce to 17.6%.

The issue date of the SPP units will be 1 July 2020 and will only be entitled to distributions declared after that date.

Accordingly the offer price under the SPP will be the issue price of the institutional placement adjusted down for distribution guidance in respect of distribution for the 6 months ending 30 June 2020.

Further information in relation to the SPP will be dispatched to eligible unit holders on or around 9 June 2020.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.