Singapore-listed Ascendas REIT is to raise S$1.2bn (€753m) to help fund S$2bn worth of acquisitions in the US, Europe and Australia.
Ascendas is buying two newly-built office towers in San Francisco for S$768m, a deal it expects to be part-funded with about S$390m of the proceeds from the launched private placement and preferential offering capital raising. The deal will also be funded by debt facilities.
“This acquisition allows us to plant a foothold in San Francisco, one of the most dynamic and progressive cities in the US,” said William Tay, executive director and chief executive officer of the manager of Ascendas REIT.
Ascendas’ head of capital markets, Yeow Kit Peng, said the assets were purchased at a 2.2% discount to their current valuation and were under-rented by around 15%.
Their addition to the Ascendas portfolio would lift the firm’s exposure to the US from 10% to 15% of its total portfolio. Ascendas entered the US market in 2018.
“We are also doing “a pre-emptive” capital raising to ensure that funds will be available for two other transactions in Europe and Australia,” Tay said.
Of the equity raised, he said S$614m would be used to fund the purchase of a data centre portfolio in Europe, and another S$180m for the planned acquisition of a suburban office building in Australia.
“We hope to close these transactions within the next one to three months,” said Tay, adding that a lot of work was yet to be done as his team worked towards closing these two “attractive” acquisitions.
To read the digital edition of the latest IPE Real Assets magazine click here.