News Analysis: More coming?

  • CICT launched S$200m private placement to fund Australia and future acquisitions at c.4% to 6% discount to yesterday’s VWAP of S$2.0561/unit. 
  • Proposed placement price is a 1.3% to 3.9% discount to the adjusted WVAP of S$2.0076/unit. 
  • Post the placement, pro-form DPU accretion for the Australia acquisition will be reduced to 1.9% vs 3.1% previously and gearing at 40.2% vs 41% previously
  • CICT appears to be prepping for more acquisition – attractive assets from sponsor pipeline includes 79 Robinson and CapitaSpring
  • Maintain BUY; TP of S$2.50. 

CICT launched S$200m private placement to fund the recent Australia future acquisitions.

Key details of the placement

  • The issue price range is between S$1.93 and 1.981, which is 3.7% and 6.1% discount to the volume weighted average price of S$2.0561 per unit for trades in the units down on yesterday, 6 Dec 2021
  • The proceeds will be utilised in 3 ways – i) S$150m for the Australia acquisition, ii) S$45.9m to fund potential acquisitions in Singapore and other developed market and iii) the remaining S$4.1m to pay estimated transaction related fees. 
  • Post the placement, the pro-forma DPU accretion for the Australia acquisition will be reduced to 1.9% vs 3.1% previously 
  • Pro-forma gearing will reduced to 40.2% vs 41% previously (vs 3Q21 gearing stood at 40.9%)

Our View

CICT’s decision to raise equity rather that to fully fund the Australia acquisition via debt will give it some breathing room for future acquisitions, albeit small. We note that CICT has allocated some amount, though small, for potential future acquisitions and names Singapore among the other developed market. We believe this is not the end and we believe CICT will continue to tap on sponsor pipeline and likely 79 Robinson or the remaining stakes in CapitaSpring as the assets are leased up. 

Stay tuned for the next sequel…