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SPH Reit borrows A$205m to fund Australia mall stake purchase

SPH Reit has obtained A$205 million (S$194.8 million) in secured loans from Westpac Banking Corp to finance its proposed acquisition of a half-stake in Westfield Marion Shopping Centre.

Inked in November, the A$670 million deal for the freehold mall in Adelaide, South Australia, will also be funded by a S$300 million issuance of perpetual securities in August plus S$164.5 million raised from a private placement last month.

SPH Reit said on Thursday evening that the Westpac facilities comprise an A$80 million single-draw term loan, a A$120 million single-draw term loan, and a A$5 million revolving term loan.

The two single-draw facilities will be used to fund the acquisition, while the revolving term loan will be used for working capital in relation to the property.

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After drawing down the Westpac loans in full and prior to the completion of the acquisition, SPH Reit’s gearing is expected to increase to 29.5 per cent from 27.5 per cent, the Reit’s manager said on Thursday.

The other 50 per cent stake in Westfield Marion will be held by Scentre Group. The deal is expected to be concluded by end-2019.

At an annual general meeting on Nov 27, Leong Horn Kee, chairman of the manager, told unitholders that the Reit is taking a longer-term view of the asset, and has plans to further redevelop the area.

Singapore Press Holdings (SPH), which publishes The Business Times, holds a near 70 per cent stake in SPH Reit.

Units of SPH Reit closed up S$0.01 or 0.9 per cent to S$1.07 on Thursday, before the announcement.