On Jan 29, ESR-REIT’s manager announced it had signed a commitment letter for $320.0 million new loan facilities on an unsecured basis, with The Hongkong and Shanghai Banking Corporation, Malayan Banking, RHB Bank and United Overseas Bank Limited. The new loan facilities, comprising a $160.0 million five-year term loan facility and a $160.0 million four-year revolving credit facility, are intended to be used to refinance the $31.0 million and $160.0 million loans due in June 2021 and October 2021, respectively.

During a results briefing on Jan 20, Adrian Chui, CEO of ESR-REIT’s manager had said that financing costs are likely to fall to 3.15% this year following a soon-to-be-announced refinancing, which was confirmed on Jan 29. In its FY2020 results, ESR-REIT’s financing costs had already fallen from 3.94% in FY2019 to 3.54% in FY2020.

As for capital raising, Chui says it will be part of a transaction where ESR-REIT acquires a portfolio, most likely from ESR Cayman. “We believe size does matter, and acquisitions are part of our three year business plans. In the later part of 2021, we will start to move overseas. With ESR Cayman’s platform, our acquisitions will focus on overseas markets were ESR Cayman has established operations,” Chui says.

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