- The low trading liquidity and analyst coverage had somewhat stunted the growth of the REIT, and
- Privatisation would take the risks off from unitholders of an upcoming asset enhancement initiative of Paragon shopping mall, considered the crown jewel of the entire REIT portfolio (at 72% of its value), for it remain competitive.
Yesterday it was announced that Paragon REIT would be taken private, subjected to approval by minority unitholders in an extraordinary general meeting (EGM) to be held sometime in April 2025. The offer price is SGD 0.98 per unit, which is around 1.07 times of the REIT’s net asset value (NAV), and along with it, (possibly) the final distribution of SGD 0.0233 per unit.
Paragon REIT malls (screenshot from Paragon REIT's media/analyst briefing slides)
While there were four reasons stated in the announcement (page 5 of the media/analyst briefing slides, link under Reference) for the privatisation, I see two main rationales, namely:
