Following on from its announcement at the end of September, Standard Life Property Investments has published details of its £100m fund raising and acquisition of a Jersey Property Unit Trust (JPUT).
Standard Life Property Investments has entered into the conditional Acquisition Agreement in relation to the acquisition of a new portfolio of 22 UK commercial real estate assets worth £165m and which generates £10.8m in rent (an initial yield of 5.96%).
In order to complete this acquisition, the Board is proposing to raise up to £100m by issuing up to 121,951,220 new shares in a placing and offer for subscription at an issue price of 82.0p (a 2.84% premium to the NAV at 30 September 2015 once the accrued dividends for the period ending 30 September 2015 have been deducted). the new shares could expand the company by 42.3%. The Board will also need to utilise the new bank facility which will allow the Group to borrow up to approximately £70.6m (at LIBOR +125bp) and its existing, available cash reserves of approximately £22m to complete the acquisition.
The combined portfolio would be worth £460m, generate rents of £29m (an initial yield of 5.97%), have a weighted average unexpired lease length of 6 years and two months. The target loan to value ratio will be between 25% and 35%, if all the borrowings are drawn down they would have £155m of debt and an LTV of 32%.
The Board has reiterated its policy of paying dividends that are fully covered by earnings.
Shareholders will have a vote on the deal on 11 December.
SLI : Standard Life Property Income publishes proposals