Ascott Residence Trust (Ascott REIT) issued a fully underwritten renounceable rights issue on 7 March to raise S$442.7 million (US$313.59 million).
Current Ascott REIT unit holders will have the option of purchasing up to 481.7 million rights units at a ratio of 29 rights units for every 100 units they own.
Proceeds will be used to partly fund the acquisition of its first property in Frankfurt (Citadines City Centre Frankfurt) and its second in Hamburg (Citadines Michel Hamburg) from The Ascott Limited for €65.4 million (US$69.2 million).
Additionally, S$381.6 million from the equity fund raising will be used to pay for the acquisition of Ascott Orchard Singapore, which is expected to be completed by Q3-2017. Ascott REIT expects yields of up to 4.5 per cent for this acquisition and 5.4 per cent for the German properties.
Once the acquisitions are completed, Ascott REIT will comprise more than 90 properties across 14 countries, expanding its asset size to S$5.3 billion and strengthening its position as the largest hospitality REIT in Singapore. Market capitalization will also grow to S$2.4 billion, increasing trading liquidity.