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JPR to fund acquisition via cash call
Posted on Friday, 14 February 2020 12:43
Commercial-use and office buildings real estate investment trust (REIT) Japan Prime Realty (JPR) is raising cash to realise external growth through the acquisition of new assets.

The Japanese group is buying a large-scale high-rise property directly connected to Chiba station from a subsidiary of its sponsor, Taisei, for JPY 13.87 billion (USD 126.31 million).

Sencity is a complex that include Sencity Tower, being a 23-story office building, and the large-scale retail facility Sogo Chiba, not to mention garden spaces, a cafeteria and 298 parking spaces.

JPR said it has hired Mizuho Securities, SMB Nikko Nomura Securities, Daiwa Securities and Mitsubishi UFJ Morgan Stanley as joint lead managers for the issue of 35,250 new units at a price to be determined.

The offering was worth JPY 17.38 billion in the market yesterday after stocks closed at JPY 493,000.

News of the capital increase came the same day as JPR announced revised operating forecasts for the six months ending 30th June 2020.

The REIT has amended its expectations following the acquisition of the Minami Semba building in January and the upcoming Sencity deal due to complete in March.

JPR anticipates operating revenue of JPY 16.44 billion and operating profit of JPY 7.99 billion, instead of JPY 15.84 billion and JPY 7.63 billion, respectively, as previously reported.

Furthermore, the REIT could book operating profit of JPY 8.17 billion on operating turnover of JPY 16.80 billion in the six months to 31st December 2020.

Zephyr, the M&A database published by Bureau van Dijk, shows 36 capital increases by lessors of real estate have been announced so far this calendar year.

Companies ranging from Grainger, Nippon Prologis REIT, and Mitsui Fudosan Logistics to Elite Commercial REIT and Shopping Centres Australasia Property Group have all sought to raise cash.

© Zephus Ltd