Australia鈥檚 second-largest shopping centre owner, Vicinity Centres, has raised A$1.2bn (鈧�725m) from institutional investors, while also foreshadowing devaluation of its assets by up to A$2.1bn.
The Australian real estate investment trust said it was seeking to raise a further A$200m through a non-underwritten security purchase plan.
The company said preliminary draft valuations indicated a reduction in aggregate asset value 鈥渋n the order of 11% to 13%, or $1.8bn to $2.1bn鈥�. Vicinity鈥檚 portfolio was valued at A$26.3bn, at 31 December 2019.
Grant Kelley, Vicinity鈥檚 CEO and managing director, said: 鈥淲e are taking decisive action today to strengthen our balance sheet and provide Vicinity with flexibility to respond to uncertainty caused by COVID-19 and the evolving retail landscape.鈥�
The equity raising, he said, provided support for the continuation of Vicinity鈥檚 investment-grade credit ratings.
Kelley said: 鈥淭his equity raising, combined with a range of cost and capital reductions implemented to date, significantly strengthens Vicinity鈥檚 financial position.
鈥淚t provides capacity to invest in our assets to ensure they continue to deliver on consumer, retailer and community expectations.鈥�
Vicinity expects rent receipts to improve as stores continue to re-open, foot traffic increases and lease negotiations are completed. Where rental relief is being negotiated, lease extensions were being sought where appropriate.
鈥淎s government restrictions have started to ease, there are some positive early signs of a recovery in centre visitation,鈥� said Kelley.
Vicinity counts Australian industry super fund UniSuper among its large investors.
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