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IREIT exercises call option for Spanish office buildings, plans rights issue

The Edge Singapore
The Edge Singapore 8/10/2020 06:05 PM GMT+08  • 3 min read
IREIT exercises call option for Spanish office buildings, plans rights issue
On Aug 7, IREIT Global’s manager announced it plans to exercise the call option to acquire the 60% of four Spanish properties it does not own from Tikehau Capital, for around €47.8 million. The transaction is subject to unitholders approval where the
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On Aug 7, IREIT Global’s manager announced it plans to exercise the call option to acquire the 60% of four Spanish properties it does not own from Tikehau Capital, for around €47.8 million. The transaction is subject to unitholders approval where Tikehau Capital cannot vote. Although City Developments is a major unitholder and also owns a 50% stake in the REIT manager, it can vote because the portfolio was jointly acquired by IREIT and Tikehau Capital.

On Dec 7, 2019, IREIT partnered with Tikehau Capital and City Developments (CDL) to acquire 100% interest in the Spanish portfolio comprising four freehold multi-tenants office buildins in Madrid and Barcelona for €133.8 million on a 100% basis. At the time, CDL extended a €32.0 million loan to IREIT to fund its 40% investment.

To fund the transaction and to repay CDL, IREIT Global’s manager has announced a renounceable non-underwritten rights issue of new units in IREIT, to raise €90 million. The ratio has not been announced but units will be issued to existing unitholders on a pro rata basis. Tikehau Capital, CDL and AT Investments have provided undertaking to subscribe for all of the rights units, with CDL (through City Strategic Equity Pte Ltd (CSEPL) and AT Investments taking up excess units. As a result of the undertakings provided by AT Investments, there may be a transfer of controlling interest in IREIT to AT Investments.

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