Ascendas Reit placement raises $208 million

Singapore's Ascendas Reit (A-Reit) raised S$301.5 million ($208 million) in a private placement on Tuesday night. The deal brings the total capital raised by the Reit so far this year to approximately S$700 million.

The primary offering consisted of 185 million new units, which were offered at a price range of between S$1.63 and S$1.70 per unit. This translates into a discount range of between 3.8% and 7.8% to the closing price on Friday (Monday was a public holiday in Singapore and the stock was suspended on Tuesday).

The deal priced at the bottom of the range, S$1.63, suggesting investors demanded the full 7.8% discount. At the close of trading yesterday, the Reit had traded down by 6.25%.

Approximately 60% of the money raised will be used to fund development projects, which means S$175.4 million will be used to develop a high-tech facility for Singapore Telecommunications (SingTel). The remaining 40% will be used to fund acquisitions of income-generating properties and pay for other made-to-measure developments in the future.

"The private placement is an opportunity in capital management to strengthen A-Reit's balance sheet to take advantage of potential investment opportunities," said Tan Ser Ping, chief executive officer of A-Reit, in a written statement. "A pipeline of potential investment opportunities at different stages of development has been established and some of these may materialise as the economic condition stabilises.