REITs have been active in acquiring properties to add to their portfolios. They do this to increase the rental income and distribution to shareholders as well as diversify the sources of rental income. In addition, there is also the potential for capital gains when the properties are sold. In the process of acquiring properties, they might also raise new capital from the market and increase the liquidity of the shares. However, do REITs overpay for their acquisitions in their attempts to expand? As industrial REITs are most active in acquisitions, we look at a list of acquisitions that industrial REITs have entered into with other companies.
Below is a table listing the acquisitions industrial REITs have carried out with other companies listed on the SGX, showing the acquisition price, valuation price and premium above the valuation price.
|Property||Date||Price||Buyer’s Valuation||Price – Valuation||% Premium|
|65 Ubi Ave …|