London-listed Globalworth Real Estate Investment said it has raised €340 mln through a non-preemptive issue of new ordinary shares to finance investment opportunities in Romania and Poland.
Jefferies acted as sole bookrunner for the equity raise, the second-largest by an AIM-listed real estate company since October 2009.
AIM-listed Globalworth placed a total of 38.8 million new ordinary shares at a price of €8.75 per share, which compares to a NAV per share of around €8.60.
The offering was 'in excess of the company's target and oversubscribed', Globalworth said in a statement. It was backed by a number of cornerstone investors including Growthpoint Properties, York Capital Management Global Advisors and Oak Hill Advisors representing nearly 50% of Globalworth's capital.
The placing will broaden the liquidity of Globalworth's shares ahead of the planned move to the Main Market of the London Stock Exchange in 2018.
'We are delighted by the strong interest shown by investors in the Placing,' said Dimitris Raptis, Deputy CEO and Chief Investment Officer. '2017 has been a pivotal year in Globalworth's development, and this is an important step in facilitating further growth and our objective to establish Globalworth as the region's leading office investor. We are now in a position to expand our portfolio in Poland and Romania through the attractive investment opportunities we have identified, enabling us to extend our mission of being the partner of choice for the wide variety of high-quality tenants in the region.'
The Bucharest-based property investor confirmed last month that it was is going ahead with plans to raise about €300 mln in a share issue to help fund its expansion in Central and Eastern Europe.
Globalworth is under due diligence to acquire five standing office properties in Poland and Romania for a total investment value of €410 mln.
The assets, which generate €35 mln in annual rental income, provide 160,000 m2 of lettable space and are being acquired at an average yield of 8.5%.
Globalworth, which currently owns a €1.08 bn portfolio, is also in the process of closing the takeover of Polish commercial landlord Griffin Premium RE (GPRE).
Poland
The GPRE deal is a major step in Globalworth's strategy to become the only listed, office landlord focused on Central and Eastern Europe and South Eastern Europe. Globalworth has previously only been active in Romania where it owns a €1.1 bn portfolio of mainly office assets.
EuroProperty, the weekly bulletin of PropertyEU Group, reported on 10 November that GPRE will bring Globalworth both a Polish listing, a €500 mln domestic property portfolio (net asset value around €250 mln), and a pipeline of other Polish assets worth €340 mln.
The offer is backed by GPRE’s largest shareholder Oaktree, which owns 48%. Globalworth will buy up to 67.9% of the company and is committed to keeping a free float and GPRE’s Warsaw stock exchange listing with one eye on becoming part of the action when the Polish government introduces REITs, expected next year.
Globalworth is getting GPRE at an offer price of 5.50 Polish zloty per share, implying an aggregate equity value of €199 mln, lower than NAV, but at a small premium to the average weighted public market price. The shares ‘have not traded brilliantly', said Andrew Cox, Globalworth's head of investor relations, since Oaktree listed the company on the Warsaw stock exchange on 13 April this year. Nevertheless, he says, it is a good price for Oaktree, which acquired the properties 'in a post-crisis deal' when assets were cheaper.
GPRE owns six offices and three office-and-retail properties worth €508 mln (at 30 June 2017), but has contracted to buy more, and the takeover by Globalworth will enable the team to deliver this growth as well as replacing a private equity main shareholder with a long-term, strategic one in the shape of Globalworth. GPRE’s pipeline includes an option to buy the remaining 75% stake it doesn’t already own in three offices it is developing in Warsaw, plus a €160 mln office portfolio from Echo Polska.
