SINGAPORE (Sept 6): Ascendas REIT is raising gross proceeds of no less than $450 million in a private placement to raise funds for acquisitions and a new development.

The private placement will sell about 178 million new units in Ascendas REITs to institutional and other investors at an issue price of between $2.528 and $2.606.

Of the gross proceeds, $250 million or 55.5% will go towards partially funding the acquisition of a second UK logistics portfolio, $109 million or 24.2% will be used to partially fund the proposed development of a build-to-suit facility in Singapore while $3.9 million will go towards paying the estimated fees and expenses for the placement.

See: Ascendas REIT to acquire portfolio of 12 UK logistics properties for $373 mil

The issue price range of between $2.528  and $2.606 per new unit represents a discount of between 3.65% and 6.53% to the volume weighted average price of $2.7047 per unit for all trades done on Thursday.

The number of new units to be sold represents 6.1% of the total 2.93 billion units of Ascendas REIT in issue as at June 28.

Update on Sept 7, 10.32am: Ascendas REIT’s manager said it sold 178 million new units at $2.54 each, raising around $452.1 million.

The REIT manager said the placement was 2.2 times subscribed, and came at the mid-point of the indicative price range of between $2.528 and $2.606 per unit.

The deal drew "strong demand" from new and existing institutional, accredited and other investors, it added.

The price per unit represents a discount of 6.09% to the volume-weighted average price (VWAP) of $2.7047 per share for the trading day on Sept 6.