Singapore-listed IREIT Global Tuesday said that it had reached a deal to acquire a property in Berlin for 144.2 million euros (S$217.7 million), marking its first acquisition since its initial public offering.
The property is located in the district of Lichtenberg, and the company said this place had been witnessing a strong growth of both commercial office development and occupancy demand.
The property comprises two fully connected building sections of 8 storeys and 13 storeys, respectively, the company said in a statement.
It is located six kilometres east of Berlin’s city centre and near the Media Spree area, which is popular with internet, media and technology companies.
IREIT said it was was attracted to this property due to the strong principal tenant – Deutsche Rentenversicherung Bund – a federal pension fund and the largest of the 16 federal pension institutions in Germany, and the opportunity for rental and value growth in this increasingly popular location. The principal tenant DRB occupies 98.8% of this property’s total lettable area on a lease expiring in June 2024 and contributes 99.6% to its gross rental income.
Choo Boon Poh, Chief Financial Officer of IREIT said, “As part of our strategy, we intend to fund the acquisition through a mix of equity and debt. IREIT has announced a rights issue to raise gross proceeds of approximately S$88.7 million. The balance of the funding for the acquisition will be through a bank loan facility, from which it intends to draw down a gross amount of approximately €102.0 million.”
With this acquisition, IREIT’s total portfolio value will increase significantly to €438.0 million (S$661.4 million) from €290.6 million (S$438.8 million).
Regarding its renounceable rights issue, it will offer 189.6 million new units at 46.8 cents, and shareholders will be entitled to subscribe to 45 rights shares for each 100 shares held.
Tong Jinquan, Lim Chap Huat and IREIT Global Management who own a total of about 76.5% of the existing units have demonstrated their commitments by subscribing to their allotment of rights units, the company said.
The REIT closed 0.5 cent higher at 80.5 cents on Monday.
As of 31 March 2015, IREIT Global’s portfolio comprises four freehold properties in Germany valued at approximately €290.6 million (S$438.8 milion). The four properties are located in the key German cities of Bonn, Darmstadt, Münster and Munich with net lettable area of about 121,506 sqm and 2,945 car park spaces.
(source – http://www.dealstreetasia.com/stories/ireit-global-buys-berlin-property-for-s217-7m-undertakes-rights-issue-to-fund-deal-8502/)