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Suntec Reit raises S$200m in private placement

SUNTEC Real Estate Investment Trust's (Suntec Reit) manager has closed the book of orders for its private placement of new units in the Reit to raise gross proceeds of about S$200 million.

The bulk of the proceeds will go towards financing potential acquisitions of properties in Australia, ARA Trust Management (Suntec) Limited said on Thursday before the market opened.

On Wednesday night, the Reit’s manager had proposed to issue 84.7 million new units to raise about S$150 million, with the option to upsize it by up to an additional S$50 million.

Of the S$200 million gross proceeds, some 83.8 per cent or S$167.5 million will be allocated for the potential acquisitions.

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The acquisitions will extend Suntec Reit’s footprint in Australia, and the properties are expected to be acquired at property yields which will enhance distributable income to unitholders, the manager said in the exchange filing on Wednesday night.

About S$28.4 million of the proceeds will be used to refinance existing debt and/or fund asset enhancement initiatives and capital expenditure, while S$4.1 million will go into paying underwriting, selling and management fees as well as other estimated fees and expenses incurred from the placement.

Any balance of the gross proceeds will go into general corporate and working capital purposes.

Net proceeds amount to about S$195.6 million after deducting the underwriting, selling and management fee and other estimated fees and expenses.

The S$1.80 per unit issue price represents a discount of 4.2 per cent to the volume-weighted average price of S$1.879 per unit in Suntec Reit for trades done on the full market day on April 24.

Citigroup Global Markets Singapore and DBS Bank are the joint lead managers and underwriters for the placement.

Suntec Reit on Wednesday morning posted a first-quarter distribution per unit (DPU) of 2.434 Singapore cents for the three months to March 31.

The counter closed at S$1.89 on Wednesday, up three Singapore cents or 1.6 per cent.