Link REIT, one of Asia’s largest real estate investment trusts, saw shares tumble on Monday following its plan to conduct a $2.5 billion rights offering.
(Bloomberg) — Link REIT, one of Asia’s largest real estate investment trusts, saw shares tumble on Monday following its plan to conduct a $2.5 billion rights offering.
Link’s shares fell 12% as of 10:37 a.m. in Hong Kong, the most since 2008. The company will issue as many as 437.7 million shares at HK$44.2 apiece on the basis of one for every five existing shares, it announced on Friday. It will use the proceeds for repaying debts and pursuing investment opportunities. Link expects net gearing ratio to decrease to below 20% with the move.
Link REIT’s proposed rights issue could dilute its dividend per unit for the fiscal year ending March 2024 by about 14%, according to Bloomberg Intelligence analysts Patrick Wong and Yan Chi Wong. Goldman Sachs Group Inc. analyst Simon Cheung on Monday downgraded Link REIT to neutral from buy with a price target of HK$68.90.
Other Hong Kong developers including New World Development Co. and Henderson Land Development Co. also saw shares fall. The former dropped by as much as 9.6%.
With the new capital, Link REIT aims to diversify further with a focus on Asia Pacific, including Singapore and Sydney, a company executive said in a media call on Friday.
Link has properties including shopping centers and office buildings in Hong Kong, mainland China, Singapore, Melbourne, Sydney and London. It invests in shopping centers, offices and logistics facilities.
–With assistance from John Cheng.
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