Soilbuild Reit launches preferential offering to raise $101.8m for Australia office property buy

SINGAPORE - Soilbuild Business Space Reit (Soilbuild Reit) has launched a fully underwritten non-renounceable preferential offering to raise about $101.8 million to fund an Australia property acquisition.

The Reit (real estate investment trust) will issue about 192.1 million new units at $0.530 per unit, which represents an approximate 8.4 per cent discount to the volume-weighted average price of $0.5788 on Aug 21.

It will issue 18 new units to unitholders for every 100 existing units held as at the close of trading on Aug 29.

Eligible unitholders can accept or decline, in part or in full, their provisional allotments of new units, and can apply for additional new units.

About $99.6 million, or 97.8 per cent of the gross proceeds, will partially fund the Reit's proposed acquisition of a multi-tenanted freehold Grade A office building at 25 Grenfell Street, Adelaide, for A$134.22 million (S$127.5 million).

The property will cost the Reit a total of about A$142 million after adding the acquisition fee, professional and other fees, and rental incentives payable to an incoming tenant.

The remaining $2.2 million of proceeds will be used to pay for the offering's related fees and expenses.

Lim Chap Huat, chairman of Soilbuild Group and non-executive director of SB Reit Management (Soilbuild Reit's manager), and his three sons - Lim Han Ren and Soilbuild Group directors Lim Han Feng and Lim Han Qin - have provided an irrevocable undertaking to accept their total provisional allotment of new units under the offering.

Mr Lim Chap Huat owns about 9.9 per cent of Soilbuild Reit units, while his sons each own about 6.6 per cent. In total, their undertakings represent about 29.5 per cent of the new units.

SB Reit Management, along with CGS-CIMB Securities (Singapore), DBS Bank, RHB Securities Singapore and Soochow CSSD Capital Markets (Asia), are joint underwriters for the offering.

Each of them has agreed to subscribe and pay for the new units at its issue price. The preferential offering is fully underwritten by the joint underwriters.

As the offering was made on a non-renounceable basis, the provisional allotment of new units cannot be renounced in favour of a third party or traded on the Singapore Exchange.

Preference will be given to the rounding of odd lots for any issue of excess new units, with applications by directors of the Reit's manager and substantial unitholders ranking last in priority.

The offering's book closure date is on Aug 29.

Applications for the offering start on Sept 3 at 9am, and close on Sept 11, with the new units listing on Sept 19, 9am.

Soilbuild Reit has 11 properties in Singapore (two business parks, nine industrial properties) and two properties in Australia (one office asset, one industrial asset).

Its units closed up $0.005 or 0.9 per cent at $0.580 on Tuesday.