ESR-Reit preferential offering 3.6 times subscribed, raises S$49.6m

ESR-REIT has raised S$49.6 million in gross proceeds from its preferential offering, which was 3.6 times subscribed, the manager said on Tuesday.

This brings the total amount raised from the real estate investment trust's equity fundraising exercise to S$149.6 million, including S$100 million from a private placement in May 2021.

Adrian Chui, chief executive of the manager, said altogether, the demand for both the private placement and preferential offering was about S$517.4 million, or about 3.5 times the total offer size.

Some 124.1 million in new preferential offering units were offered on the basis of 32 preferential offering new units for every 1,000 existing units, at a price of S$0.40 apiece.

This represents a discount of about 9.2 per cent to the volume-weighted average price of 44.03 cents per unit of all trades done in the units on July 26, up to the time the preferential offering was announced on July 27.

Sponsor ESR Cayman provided a bull backstop for any unsubscribed preferential offering units to demonstrate its support. Since the offering was oversubscribed, ESR Cayman did not make an excess application for any excess new units, the manager said.

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It expects the new preferential offering units to list on the Singapore Exchange on Aug 26 at 9am.

Net proceeds from the S$149.6 million equity fundraising will be used to partially finance the acquisition of 46A Penjuru, a ramp-up logistics facility, as well as partially fund upcoming asset enhancement initiatives for 7000 Ang Mo Kio Avenue 5 and 16 Tai Seng Street.

The net proceeds will also be used to partially repay existing debt drawn down to fund the acquisition of the Reit's 10 per cent stake in ESR Australia Logistics Partnership.

Units of ESR-Reit closed 2.1 per cent or S$0.01 higher at S$0.48 on Monday.