Croesus to buy Japan retail property for 8b yen, funding with debt and rights

CROESUS Retail Asset Management, the trustee manager of Croesus Retail Trust, said late Monday night that it will fund its latest retail property acquisition in Japan with a mix of debt and equity.

Croesus will buy Torius Property, a suburban retail mall in Fukuoka, Japan, comprising 36 buildings, for about eight billion yen (S$95.2 million).

It will issue new Japanese five-year bonds of four billion yen and also issue 114,222,677 new units based on 22 rights units for every 100 existing units at an issue price of S$0.61 per rights unit.

The rights issue is expected to raise S$69.7 million.

Croesus said the pro forma net property income (NPI) yield for Torius is 7.8 per cent, compared to the actual NPI yield of 5.3 per cent for its existing portfolio, for its financial year ended June 30, 2015.

The pro forma distribution yield of the enlarged portfolio would increase to about 9.41 per cent compared to 9.4 per cent currently.

Croesus closed at 86 Singapore cents on Monday before the announcement was made, down half a cent.