For existing shareholders of SBREIT, is it worth considering the
offer based on the following extracted info?
Soilbuild Business Space REIT’s (SBREIT) announced a non-renounceable preferential offering of 192,135,040 new units at an issue price of S$0.530 on the basis of 18 new units for 100 existing units. The offer price represents an 8.6% discount to 21 Aug’s close price. SBREIT plans to raise gross proceeds of approximately S$101.8m to fund the proposed acquisition of a property in Adelaide, Australia. Investors on SBREIT’s books as of 29 August are eligible for the offering which opens from 3rd to 11th September. The acquisition is expected to be DPU dilutive, with pro-forma FY18/1HFY19 DPU to fall 3.3% and 2.4% respectively, assuming 74% equity and 26% debt mix for the preferential offering of S$101.8m. Post-acquisition gearing is expected to fall from 39.4% to 38.3%. Management sees the proposed acquisition as an opportunity to deepen SBREIT’s presence in the attractive Australia office market and to increase diversification of SBREIT’s portfolio. Prior to this development, we had a HOLD rating and fair value estimate of S$0.60