Japan Retail Fund, MCUBS MidCity to merge into Japan’s largest REIT and other APAC REIT news

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Shares in Tokyo-listed Japan Retail Fund Investment Corp. (JRF) and MCUBS MidCity Investment Corp. (MMI) soared today after announcing plans to merge into Japan’s largest REIT, with more than JPY 1.19 trillion (~US$11.2bn) in assets.

Shares in JRF jumped 12.37% to JPY 159,900 and stocks in MMI bounced 7.18% to JPY 82,100.

The REITs said the COVID-19 pandemic had accelerated changes to the retail and office environments, with greater take-up of e-commerce and remote working. 

The combined entities will become Japan Metropolitan Fund Investment Corporation – a diversified REIT with 127 properties including the GYRE retail property and Twin 21 office asset. 

The REITs said the merger will diversify the combined portfolio and allow the new REIT to operate mixed-use properties, while increasing its market presence and scale. 

Under the merger, MMI will be absorbed, with MMI shareholders receiving one JRF investment unit per each MMI investment unit.

“As its growth strategy, the new corporation will aim in the short term to further increase distributions per unit through implementing various measures to increase revenue, while seeking further promotion of investment in urban properties through strategic asset replacement and appropriate diversification of purposes of use in the portfolio,” the REITs said. (Read more)

Index Change Value at close
S&P/ASX 200 A-REIT +1.42% 1,310.80
S&P/ASX 200 -0.22% 6,060.50
FTSE ST REITS +0.82% 839.14
STI -0.28% 2,532.51
Tokyo Stock Exchange REIT +0.57% 1,747.53
Nikkei 225 +1.12% 23,139.76
Hang Seng REIT +0.37% 5,577.63
Hang Seng -0.96% 25,177.05

Singapore: ESR-REIT defends Sabana REIT merger

Singapore-listed ESR-REIT has defended its proposed merger offer to acquire Sabana REIT, arguing that  the terms of the merger are fair and will result in a win-win outcome for all unitholders. 

Under the offer, Sabana REIT unitholders will receive new ESR-REIT units based on a fixed gross exchange ratio of 0.940x rather than a fixed offer price.

Earlier this month, fund managers Quarz Capital Management and Black Crane Capital said that the transaction terms undervalued Sabana REIT and that they both intended to vote against the proposed merger.

“We believe the proposed terms of the merger are fair,” said Adrian Chui, CEO and executive director of ESR-REIT’s manager. 

“They take into account the portfolio risk, capital structure, and historical trading price of the two REITs. The increased diversification will make the REIT more resilient, which is crucial as we battle the impact of the pandemic.” (Read more)

ESR-REIT shares finished trading 5.19% higher at S$0.41, while Sabana REIT shares closed flat at S$0.37.

Australia: Centuria Industrial REIT grows portfolio to A$2.1bn 

Centuria Industrial REIT (CIP) completed its acquisition of the Telstra data centre in Melbourne for A$416.7m, as well as another Melbourne industrial property for A$14m. 

The settled deals, in addition to three recent acquisitions in Sydney, Melbourne and Brisbane, grew CIP’s portfolio to 55 assets, with a combined value of $2.1bn.

“The acquisition of Telstra’s data centre along with four additional high quality industrial assets has generated strong momentum through the first quarter of FY21,” said CIP fund manager Jesse Curtis.

“CIP’s portfolio has grown to over $2 billion, marking another major milestone and further cementing CIP’s position as Australia’s largest domestic pure play industrial REIT.” (Read more)

CIP shares closed 0.32% lower to A$3.12.