Elite Commercial REIT to finish maiden portfolio acquisition

It plans to issue 131.4 million units at $1.27 per unit.

Elite Commercial REIT has planned to issue up to 131.4 million new units at a price of $1.27 (£0.68) per unit to Elite UK Commercial Fund II as partial consideration for the proposed $395.6m (£212.5m) acquisition of 58 commercial buildings across the United Kingdom.

The issue price of consideration units represents a 3.8% premium over the current unit price, whilst the total amount of consideration units to be issued is at $166.4m (£89.4m) and is going to increase the REIT’s market capitalisation by approximately 39%.

Chief Executive Officer Shaldine Wang noted that the REIT has a unique investment strategy and resilient portfolio to provide stable returns and opportunities for future income and capital growth.

“Going forward, the manager will focus on strengthening the enlarged portfolio and will closely monitor the market to explore opportunities for growth via yield-accretive acquisitions,” Wang said.

Following the receipt of the consideration units, vendor nominee Elite UK Commercial Fund II will do a distribution in specie of considerations to its investors, all of whom are unrelated third parties.

This will result in reinsurance firm PartnerRE being the largest investor of the vendor nominee, holding approximately 23% of the REIT’s enlarged share capital.

“PartnerRE’s decision to roll over their investment in the portfolio of 58 quality commercial properties across the UK into Elite Commercial REIT is a display of the confidence in the REIT’s portfolio and investment strategy,” Wang said.

The REIT’s manager has also secured a one-year bridging loan of up to $18.6m (£10m).

The completion is expected on 9 March.