Property developer Mirvac Group (ASX: MGR) has plans to acquire a portfolio of assets from GE Real Estate Investments Australia and has launched a fully underwritten $400 million institutional placement to largely fund the deal.
The acquisition is expected to enhance Mirvac’s office operational leverage across a $4.1 billion portfolio of 32 properties.
The group will acquire seven assets with a combined purchase price of $584 million, with the transaction expected to be neutral to fiscal 2013 operating earnings per share and accretive from fiscal 2014 onwards.
Sixty nine per cent of the acquisition portfolio is comprised of two A-grade landmark assets –Allendale Square, Perth and 90 Collins Street, Melbourne – which increase Mirvac’s core portfolio exposure to the Perth and Melbourne CBDs.
The portfolio also includes five Sydney CBD assets located in the strategically significant Alfred, Pitt, Dalley and George Streets (APDG) precinct, restocking Mirvac’s commercial development pipeline with assets that can be held for the long term.
Equity raising
By undertaking a fully underwritten $400 million institutional placement, Mirvac can maintain its gearing at the midpoint of its revised target range of 20% to 30% and preserve its funding capacity for future growth opportunities.
The institutional placement is being undertaken at $1.69 per stapled security, which represents a 3.2% discount to Mirvac’s last closing price of $1.745 on 9 May 2013.
The company is also undertaking a non-underwritten share purchase plan offering eligible securityholders up to $15,000 of stapled securities at the same price as the placement.
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