Ascendas REIT fixed the pricing of its preferential offering at $2.96 per new unit. Eligible investors are offered the option to subscribe for 37 new units for every 1,000 existing shares held as of 18th November 2020.
Since I only hold 1,000 shares exactly, I’m only eligible for 37 shares. I decided to apply for 100 shares anyway, since I can apply for excess units. Excess units would probably be from other investors who are eligible for preferential offering but decided not to take it up.
Since the offer price is only slightly discounted from market price of $3.02 (as of today’s close), I expect many investors might pass on this one.
Proceeds will be used to partially fund proposed acquisitions including 2 offices in San Francisco (tenants are Stripe and Pinterest), data centres in Europe, and a suburban office in Australia.
I like the proposed acquisitions especially those in US and Europe, since it gives Ascendas REIT greater exposure to the tech sector. US properties are located within technology and life sciences ecosystem. Data centres are a growth area with greater digitalization.
I’m bullish on Ascendas REIT long-term, so I’m subscribing and even looking to buy more shares in the open market since prices look attractive. Current yield of 3.8% is not too shabby either. Fingers crossed I get my excess units to at least make up 100 shares.
Update: Ascendas REIT was oversubscribed by around 1.5 times. Guess it means my chances of getting excess rights are really slim. Market price has also dropped to $2.97 (4/12/2020 close), only slightly above the PO offer price of $2.96. Price looks juicy, I might actually consider picking up more shares from the open market too.
Disclosure: I am long Ascendas REIT A17U