Centuria Metropolitan REIT is launching a A$60 million accelerated nonrenounceable entitlement offer to partially fund acquisition agreements with a A$119.1 million price tag for two office assets in New South Wales.
Specifically, the company is buying the 77 Market St. commercial building Wollongong for A$33.3 million and a 50% freehold stake in the 201 Pacific Highway office asset in St Leonards for A$85.8 million.
Acquired through an off-market sale-and-leaseback deal with AHM Group, 77 Market St. offers 6,755 square meters of net lettable area across five levels, as well as 131 car parking spaces. Its major tenants are Medibank, Illawarra Retirement Trust, KPMG and the New South Wales Police.
The 10-floor 201 Pacific Highway office building has 13,841 square meters of net lettable area, including 2,658 square meters of retail space. It is adjacent to the company's 203 Pacific Highway. Cisco Systems is using the property as its data center, having invested significant infrastructure in the asset. Centuria Metropolitan, or its nominee, plans to acquire the remaining 50% in the building before June 8, 2018.
The planned acquisitions will be funded by equity and debt, with the REIT planning an underwritten 1-for-8.65 accelerated nonrenounceable entitlement offer. Each security to be offered will be priced at A$2.39, a 2.4% discount to the Dec. 4 closing price of the company.
An accelerated A$25 million institutional entitlement offering and a A$35 million retail entitlement offering will comprise the equity raising. The retail entitlement offer will open Dec. 11 and close Dec. 20, while the institutional component opens and closes Dec. 5.
Moelis Australia Advisory Pty. Ltd. and UBS AG Australia branch are the underwriters of the issuance.
