Arena REIT has undertaken a $60m equity raising. Macquarie notes the balance sheet gearing will decline to 17.6%, materially below the target range of 35-40%.
The equity raising is assessed to be -4.3% dilutive to FY21 earnings per share before deployment of the proceeds. This can be recouped by deploying the proceeds in social infrastructure assets.
Meanwhile, rent relief discussions are complete across around 50% of tenants that are eligible. Outperform retained. Target is raised 7.3% to $2.63.
Sector: Real Estate.
Target price is $2.63.Current Price is $2.40. Difference: $0.23 – (brackets indicate current price is over target). If ARF meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).