What Investors Should Know About SPH REIT’s First Acquisition In Australia

On 21 December 2018, SPH REIT (SGX: SK6U) made its maiden acquisition in Australia. This was the REIT’s second transaction in 2018, following its acquisition of the Rail Mall in May 2018. The buying spree has marked a significant change in strategy with SPH REIT having not made any acquisitions since its listing in 2013 up till this year. Together, with its existing assets- Paragon and The Clementi Mall, its two acquisitions bring its asset count to four and expand its geographical footprint beyond our shores.

Here is what investors should know about the latest acquisition and how it will impact unitholders going forward.

In the past, SPH REIT was resistant to making major acquisitions. However, the two recent acquisitions of Rail Mall and now Figtree Grove could signal a change in tact. With a low gearing ratio, SPH REIT has the financial muscle to make more debt-funded acquisitions that can be yield-accretive. If put to use, SPH REIT can deliver earnings-accretion and unlock more shareholder value in the future.

Click Here : https://www.fool.sg/2019/01/09/what-investors-should-know-about-sph-reits-first-acquisition-in-australia/

#General