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Centuria Office REIT (ASX:COF), Fund Manager, Grant Nichols
Source: Centuria
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  • Centuria Office REIT (COF) is looking to raise $201 million to partially fund the purchase of two office buildings
  • The raise is at a fixed issue price of $2.50 per share, which represents a 3.5 per cent discount on the last close price
  • Centuria Capital Group (CNI), COF’s largest unitholder, has agreed to purchase $25.5 million in additional units
  • Shares in COF are sitting at $2.59 in a trading halt

Centuria Office REIT (COF) is seeking to raise $201 million to partly fund the acquisition of two office buildings.

On Monday morning, the company’s shares were placed in a trading halt as its brokers, Morgan Stanley and MA Moelis, began rallying up investor backing.

The raise is at a fixed issue price of $2.50 per share, which represents a 3.5 per cent discount on the last close price.

COF has signed a contract to buy 101 Moray Street in South Melbourne, for $205.1 million and has received and accepted a pre-emptive notification for 203 Pacific Highway for $68 million.

COF fund manager Grant Nichols said the acquisitions are strategically located high-quality properties.

“101 Moray Street is located in the attractive near city location of South Melbourne, just one kilometre from the Melbourne CBD,” he said.

“The asset is a brand new prime grade office building with CBD views and built to the highest specification, with a focus on delivering a unique tenant experience. It was fully leased within nine months of practical completion and now enjoys a strong and diversified income profile.”

Mr Nichols said the 203 Pacific Highway property is an established metropolitan office market that will benefit from the Sydney Metro Infrastructure project.

“The acquisitions are strongly aligned with COF’s stated strategy and deliver several benefits including broader geographic diversification, high occupancy, young assets with sustainable and affordable rent profiles and an enhanced portfolio WALE,” he said.

COF currently owns a 50 per cent stake in 203 Pacific Highway. Centuria 203 Pacific Highway Fund, a closed-end unlisted fund managed by Centuria Property Funds Limited (the responsible entity for COF), is acquiring the remaining 50 per cent interest in 203 Pacific Highway.

As the vendor is a connected party of CPFL, the purchase must be approved by COF unitholders through an ordinary resolution.

COF is launching a fully underwritten 1 for 6.4 expedited non-renounceable entitlement offer to raise $201 million to help fund the acquisitions. An expedited institutional entitlement offer and a retail entitlement offer will be part of the equity raising.

From the date of issuance, new units issued under the equity raising shall rank equally with existing COF units.

Centuria Capital Group (CNI), COF’s largest unitholder, has agreed to purchase $25.5 million in additional units.

Shares in COF are sitting at $2.59 in a trading halt.

COF by the numbers
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