Fortune REIT: Announced that it will buy two commercial properties, namely the Belvedere Garden Property and the Provident Centre Property in Hong Kong for HK$1.9b (US$244.4m).
The Total Consideration is payable on completion, and will be financed by first drawing down on the term loan facility under the new facility, with the revolving credit facility of the existing facility and internally generated funds being used to finance the remainder.
Financial effects of the acquisition are as follow:
1) Using FY10 fin statements, after the acqisiton, DPU will improve to 25.63 HK cents from 24.35 HK cents, while NAV will decrease slightly to HK$6.14 from HK$6.18, upon issue of 5.3m new units issued as acquisition fees.
2) Gearing will increase to 28.3% from 21%
Overall, the acquisition appears to be a fair/good deal, , slightly below the appraised value of Independent valuers from Knight Frank and Savills.
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