I have to do a double take because I thought yesterday’s announcement that Lippo Mall Retail REIT’s purchase of 2 Indonesian shopping mall was the acquisition they made sometime ago. My friend have to inform me that these are more acquisitions.
Announcements here and here
In total, LMIR bought up 6 malls totaling SGD $307 mil. They will be funding the acquisitions by SGD $200mil Notes with interest at 4.88%, SGD $50 mil Notes with interest at 5.875%, new notes under the EMTN program, new loan facilities and cash reserves.
Rational of acquisitions:
- Discount to NAV
- Enhance Earnings of LMIR Trust
- Properties located at strategic locations with high retail traffic
- Economies of scale
- Diversification of Portfolio
LMIR was
yielding 6.7% and have a net debt to asset of 2.8%.
The positive thing about the acquisition is that they are made at discount to latest valuation.
However ......
