Managers of Real Estate Investment Trusts (REITs) often have various reasons to raise funds from the capital market. The purposes could be for the purchase of assets, acquisition of another company or simply to pare down debts. To raise capital, the management may choose to issue rights offering, bonds, private placements or even borrow from the banks. In this article, I will share my perspective on rights offering from REITs.

Rights offering

Before proceeding further, it is important to understand the difference between a rights and options. The former is an offer to existing shareholders or unitholders of a REIT to purchase additional shares or …