Ascott ready to pounce with $300m war chest

More acquisitions to date.

According to DBS, Ascott Residence Trust (Ascott REIT) recently completed a private placement exercise, which boosted its acquisition kitty by an additional S$150m.

The issue price for the new units at $1.305 implies a 4.6% discount to the adjusted VWAP on 28 Jan 13 (placement agreement entered into with the placement agents) and a c3% discount to its latest reported NAV/share.

A pre-emptive exercise with no targets identified at this point, with proceeds to be utilised across a myriad of uses - potential acquisitions, asset enhancements or debt repayment.

Here's more from DBS:

Awaiting deployment of proceeds, assuming acquisitions of S$300m in forecasts. We believe that proceeds will be utilised towards value accretive and yield
enhancing acquisitions.

Management is reviewing opportunities in the region and has previously alluded to be focusing on higher growth markets within Asia. We now factor in S$300m worth of acquisitions (@ 6.0% yield) in our forecasts, assuming a target post acquisition gearing of c39%.

We estimate that every additional S$50m in acquisitions will raise gearing by 1 ppt, and DPU estimates and our TP by c.1%-1.5%.

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