Arena REIT Equity Raising for Acquisition

Arena REIT Group announced this week that it was undertaking an equity raising to fund the acquisition of additional social infrastructure properties with a total investment of A$62 million.

The group has settled, exchanged contracts or entered heads of agreement during 2H FY19 to acquire and develop:

  • three specialist disability accommodation properties for a total investment of A$24 million

  • three Early Learning Centre properties for a total investment of A$13 million

  • five Early Learning Centre developments with a total anticipated project investment of A$25 million

The equity raising is a fully underwritten A$50 million institutional placement at an issue price of A$2.67 per new stapled security and will include a non-underwritten Security Purchase Plan (“SPP”) to eligible securityholders to raise up to A$5 million. The Institutional Placement is fully underwritten by Morgan Stanley Australia Securities Limited; Evans Dixon Corporate Advisory Pty Limited is acting as adviser to the transaction.

The issue price represents a 4.3% discount to the last closing price of A$2.79 on 20 May 2019; and 2.4% discount to the five-day Volume Weighted Average Price of A$2.74 to 20 May 2019.

Outlook and FY20 Guidance

Arena confirms the FY19 distribution of 13.5 cents per security and provides FY20 distribution guidance of 14.3 cents per security8 (+5.9% on FY19) representing a distribution yield of 5.4% at the Institutional Placement price.