LENDLEASE Global Commercial Reit's JYEU : JYEU 0%private placement to raise at least S$325 million was 3.3 times subscribed.

The upsized option was also exercised, bringing the total amount raised via the private placement to S$400 million for the issue of 551.7 million new units.

There was strong interest from new and existing institutional investors as well as real estate specialist funds, which account for more than 80 per cent of total proceeds, the manager said in a bourse filing on Wednesday (Mar 23).

Together with the preferential offering, where a total of 345.6 million units will be issued at S$0.72 apiece, the total amount raised in the equity fundraising exercise will be about S$648.8 million.

The private placement was priced at S$0.725, the lower end of its S$0.725 and S$0.74 issue price range. This represents a discount of about 9 per cent to the real estate investment trust's (Reit) volume-weighted average price (VWAP) of S$0.7964 per unit on Mar 21 - the last market day before the underwriting agreement was signed.

As part of the private placement, the manager plans to declare an advanced distribution of between S$0.01 to S$0.012 for the period from Jan 1 to the day before the new private placement units are issued – estimated to be Mar 31.

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The manager on Tuesday proposed to raise at least S$573.8 million through the private placement and preferential offering. Citigroup Global Markets Singapore, DBS, OCBC and UOB were appointed joint bookrunners for the equity fundraising.

On the use of proceeds from the fundraising, the manager said about 98.4 per cent or S$638.7 million will be used to partially finance the Reit's S$2.1 billion acquisition of the remaining stake in Jem that it does not already own. The rest will be used to pay any expenses incurred in connection with the equity fundraising.

The Reit currently holds an indirect 31.8 per cent stake in the prime Jurong East shopping mall. In February, the manager proposed to acquire the remaining interest at an agreed property value of S$2.1 billion.

If the deal goes through, Jem will bump Lendlease Reit's total portfolio net lettable area up by a substantial 70 per cent, to around 2.2 million square feet. The transaction is also expected to provide a 10.5 per cent distribution per unit accretion, based on H1 2022 pro-forma estimates. 

Lendlease Reit units were trading 4.4 per cent or S$0.035 lower at S$0.76 as at 10.37 am on Wednesday after the counter resumed trading. The manager called for a halt on Tuesday morning before announcing the equity fundraising.

READ MORE:

• Lendlease Reit to raise at least S$573.8m to fund Jem acquisition

• Lendlease Reit to acquire remaining interest in Jem mall at S$2.08b agreed property value

• Brokers' take: UOBKH and CGS-CIMB positive on Lendlease Reit's acquisition of Jem