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Manulife US Reit raises US$94m in oversubscribed issue of new units at US$0.824 apiece

MANULIFE US Reit has raised US$94 million from the issue of 114.1 million new units at US$0.824 per unit. The issue price represents a 4.37 per cent discount to the unit's price of US$0.86 as at 3.45pm on Tuesday.

The Reit (real estate investment trust) previously looked at raising about US$94 million in gross proceeds through the issue of up to 115.9 million new units at an issue price of between US$0.811 and US$0.836 apiece.

It said the latest private issuance exercise was oversubscribed with strong participation from existing unitholders and new institutional investors.

DBS, CLSA Singapore and OCBC were joint lead managers and underwriters for the private placement.

Trading of the new units is expected to commence at 9am on May 9.

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Significant portions of the proceeds will pay for part of its US$122 million acquisition of two freehold US office towers, Centerpointe I & II, in Fairfax, Virginia.

The new additions to Manulife US Reit's portfolio will raise the Reit's free float market capitalisation to US$1.1 billion, from US$1 billion.

The Reit is looking to reach a US$1.2 billion market cap for inclusion in global property indices. It said it had written to the FTSE (Financial Times Stock Exchange) regarding this threshold, which fluctuates according to market performance. 

"This number is well-known among fund managers and bankers as it is something they track closely as there is an expected 're-rating' when that happens to specific stocks," said Manulife US Reit's head of investor relations, Caroline Fong.

"We believe we are just another deal short from hitting this criteria. That (hitting the threshold) could also happen if the share price trades up. It is not top down whereby we acquire for the sake of doing so to get into the index."

She said that this topic was one of the hot questions asked during recent investor meetings.

"We continue to watch this space very closely as there are many funds which are benchmarked against this index and an inclusion will mean they may have to add us to their portfolio."

NAREIT APREA is one of the global indices the Reit is eyeing, and which Ms Fong said "we are very close to getting in". She added that others it could look at down the line include other larger MSCI indices with higher thresholds on size.

Manulife US Reit is already included in the MSCI Singapore Small Cap Index.


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