How Fortune REIT can milk benefits from Kingswood Ginza acquisition

Its portfolio valuation could jump by ~26%.

According to OCBC Investment Research, FRT has entered into a non-binding MOU regarding the acquisition of the entire issued share capital of the target company by FRT and the assignment of the shareholder loans to FRT.

OCBC noted that the target company owns Kingswood Ginza Property, which comprises the entire Kingswood Ginza Mall as well as other retail, kindergarten, parking lots and ancillary spaces.

Kingswood Ginza Mall is the largest shopping center in HK’s Yuen Long district and is in close proximity to the mainland. 

Here's more:

The acquisition could increase FRT’s portfolio  valuation by ~26%. 142,962,000 new units, representing an increase of 8.4% over the number of prior units, have each been placed out at HK$6.82, which is at a discount of 4.4% to the volume weighted average price for trades done on the SGX-ST and the SEHK for 29 July.

The net proceeds of ~HK$947m is intended to partially fund the acquisition. The remainder funding will come from new facilities which will bear a blended interest margin of 1.48% per annum over HIBOR. The borrowings will become payable in 3.5 to 5 years.