MacarthurCook Reit Delays Fund Raising Amid Volatility

Source : The Straits Times, Jan 19, 2008

THE recent volatility in financial markets has stymied a fund-raising plan by Singapore-listed MacarthurCook Industrial Reit (MI-Reit).

The real estate investment trust (Reit) said yesterday it would postpone plans to raise up to $200 million ‘until markets are more conducive’. It did not specify a target date.

It added, though, that this move would not hinder any plans that the Reit had for the additional funds.

The postponement comes amid the ‘current turmoil in the international capital markets’, said Mr Chris Calvert, chief executive of MacarthurCook Investment Managers, which manages the Reit.

He said in a statement that this decision would help ‘preserve the value of unitholders’ equity’.

MacarthurCook said last month it intended to issue more units of MI-Reit to raise gross proceeds of up to $200 million.

This would be used to buy some properties that MacarthurCook had its eye on and refinance some of the Reit’s recent property acquisitions in Singapore and Japan.

The potential acquisition properties , however, ‘didn’t come through’ anyway, so postponing the fund raising will cause ‘no disruptions’ to MI-Reit’s acquisition plans, said a MacarthurCook spokesman yesterday.

Also, the Reit’s gearing is still comfortably within its long-term target, so refinancing is not an urgent requirement, the spokesman added.

MI-Reit’s gearing is expected to be about 41 per cent after the expected completion of its acquisitions in its fourth quarter, which ends March 31. Its long-term gearing target is between 40 per cent and 50 per cent.

MI-Reit units closed down three cents yesterday at 90 cents.