Firm acts on $260m capital raising

One firm has acted for a major REIT in a $260m fully underwritten institutional placement and entitlement offer.

Baker & McKenzie has acted for joint lead managers and underwriters J.P. Morgan and Morgan Stanley on the $260m fully underwritten institutional placement and entitlement offer by National Storage REIT.

Lead partner on the deal Lauren Magraith said last week’s Brexit decision complicated the capital raising at the last minute.

“The timing of the transaction ended up being the key issue in the closing days of preparations - with the impact of the Brexit decision causing significant market volatility and uncertainty in Australia and in markets throughout Europe and the US, this was a difficult time to launch a capital raising,” Magraith told Australasian Lawyer.

“However, given NSR is a defensive and stable industrial REIT with no exposure to the UK, and it was completing an accretive acquisition of well-known assets, both NSR and the underwriters were confident the transaction would be well received by investors.”

One of the largest self-storage providers, National Storage REIT provides self-storage units to over 35,000 residential and commercial customers across Australia and New Zealand.

The $260m raised in capital will be used to acquire the portfolio of Southern Cross Storage assets from Heitman LLC, which is currently managed by National Storage REIT.  The funds represent over 40% of the company’s market capitalisation, Magraith said.

“Our clients are still preparing for IPOs and secondary raisings in the second half [of 2016], and once we move through the August reporting season we expect to see activity levels pick up substantially,” she said of Australia’s sudden market volatility following the Brexit.

“The implications of Brexit will obviously affect capital markets for a period, whilst people digest the potential impact of the decision - however as demonstrated by the NSR raising, investors will still support high quality transactions even in times of uncertainty and volatility.”

Baker & McKenzie has acted for J.P. Morgan and Morgan Stanley for a number of years, having advised on National Storage REIT's initial public offering in 2013 and each of its subsequent capital raisings since.

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