Australia’s second-largest shopping centre owner, Vicinity Centres, has raised A$1.2bn (€725m) from institutional investors, while also foreshadowing devaluation of its assets by up to A$2.1bn.
The Australian real estate investment trust said it was seeking to raise a further A$200m through a non-underwritten security purchase plan.
The company said preliminary draft valuations indicated a reduction in aggregate asset value “in the order of 11% to 13%, or $1.8bn to $2.1bn”. Vicinity’s portfolio was valued at A$26.3bn, at 31 December 2019.
Grant Kelley, Vicinity’s CEO and managing director, said: “We are taking decisive action today to strengthen our balance sheet and provide Vicinity with flexibility to respond to uncertainty caused by COVID-19 and the evolving retail landscape.”
The equity raising, he said, provided support for the continuation of Vicinity’s investment-grade credit ratings.
Kelley said: “This equity raising, combined with a range of cost and capital reductions implemented to date, significantly strengthens Vicinity’s financial position.
“It provides capacity to invest in our assets to ensure they continue to deliver on consumer, retailer and community expectations.”
Vicinity expects rent receipts to improve as stores continue to re-open, foot traffic increases and lease negotiations are completed. Where rental relief is being negotiated, lease extensions were being sought where appropriate.
“As government restrictions have started to ease, there are some positive early signs of a recovery in centre visitation,” said Kelley.
Vicinity counts Australian industry super fund UniSuper among its large investors.
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