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CapitaLand Ascendas Reit’s recent buy highlights risk of buying properties with short lease

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Leslie Yee

Leslie Yee

Published Thu, May 25, 2023 · 05:50 AM
    • CapitaLand Ascendas Reit has recently completed a private placement and will use some of the proceeds raised to partially fund the purchase of The Shugart.
    • CapitaLand Ascendas Reit has recently completed a private placement and will use some of the proceeds raised to partially fund the purchase of The Shugart. PHOTO: CAPITALAND ASCENDAS REIT

    SOME investors are shunning listed real estate investment trusts (Reits) as interest rates rise. Equity raising for Reits is much more difficult today.

    Kudos, then, to the manager of CapitaLand Ascendas Reit (Clar). The business space and industrial Reit recently closed a private placement that was upsized from S$450 million to S$500 million. As a unitholder, I am pleased the trust has strengthened its balance sheet.

    The issue price of the new units under the private placement is S$2.727 per unit. The pricing represented a discount of 3 per cent to the volume-weighted average price of the units traded in the day prior to launch of the placement, less estimated advanced distribution.

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