AIM-listed Globalworth Real Estate is seeking to raise about €300 mln in a share issue to help fund its expansion in Central and Eastern Europe.
Globalworth said the non-pre-emptive issue of new ordinary shares was 'in response to significant investor interest and to take advantage of a pipeline of attractive investment opportunities in both Poland and Romania'.
The size of the share issue can be varied dependent on demand. 'The company has received strong indications of support from existing and new investors for this equity raise and currently expects to price it at or around prevailing EPRA NAV per share,' Globalworth said in a statement. The EPRA NAV per share stood at €8.30 at end-H1 2017.
In addition to funding further investments, a key objective of the intended equity raise is to attract new institutional investors and broaden the liquidity of the company's shares ahead of its planned move to the Main Market of the London Stock Exchange in 2018.
The equity raise is designed to help the company in managing its gearing strategy to a target LTV of 35%.
Globalworth also confirmed that based on the current timetable any placing shares will be entitled to the H2-17 dividend previously stated at €0.22 per share. The prospective dividend for H1 2018 will be 'no less than €0.27'.
Poland
The capital raising comes weeks after the Bucharest-headquartered company reached agreement to acquire control of Polish commercial landlord, Griffin Premium RE (GPRE).
The 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 combination of the two platforms makes us the largest listed office operator in the CEE region,’ Globalworth’s deputy CEO Dimitris Raptis (pictured) told EuroProperty.
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.
