Dexus announces $500m capital raising

Dexus has announced it will acquire a 25 per cent interest in the MLC Centre at 19 Martin Place and a 100 per cent interest in 100 Harris Street, Pyrmont.

The fund manager has also announced it will acquire a "core industrial property" in Melbourne.

Under the agreements currently in place, the total consideration for the three acquisitions is $739.3 million.

The acquisitions will be funded through a $500 million capital raising and the utilisation of debt facilities of up to $288.6 million.

The capital raising will consist of a fully underwritten $500 million institutional placement and a non-underwritten security purchase plan to eligible Dexus shareholders that will raise up to $50 million.

The Dexus Wholesale Property Fund (DWPF) will also acquire a 25 per cent interest in the MLC Centre, according to a statement by the company. 

As a result of the acquisitions, the weighting of Sydney properties in the Dexus office portfolio will increase from 65 per cent to 67 per cent.

Update: S&P Global Ratings released a statement on Wednesday afternoon confirming that Dexus' credit rating would be unaffected by the acquisitions.

"In our opinion, the [Dexus] companies have sufficient headroom in their credit metrics to accommodate these transactions," said S&P.

"As of 31 December 2016, Dexus' look-through proforma gearing after the acquisition is likely to be 26.9 per cent, consistent with our expectation that Dexus will keep its gearing within the range of 30-35 per cent.

"Meanwhile, DWPF's proforma gearing will be 12.1 per cent after the acquisition and subsequent capital raising, which is in line with its financial profile."

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Dexus announces $500m capital raising

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Last Updated: 21 June 2017 Published: 21 June 2017