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Characteristics of A-Reit Private Placements During the Global Financial Crisis

Author/s: Bill Dimovski, Leonie O’Neill

Date Published: 1/01/2012

Published in: Volume 18 - 2012 Issue 2 (pages 180 - 190)

Abstract

The study investigates a variety of characteristics surrounding Australian Real Estate Investment Trust (A-REIT) private placements with a dataset of A-REIT private placements from July 2006 to June 2011. The private placement of equity securities raised over A$10.4 billion for A-REITs during this period of which nearly A$7.3 billion was raised after the December 2007 Centro Properties liquidity problem announcements and the subsequent global financial crisis, with most of this capital raised during 2008 and 2009. The size and speed of the capital raising continues to suggest that A-REITs are regarded highly by the investment community. Additionally, while the general finance literature suggests that existing shareholders do not fare badly from private placements offered to subscribers issued at a discount, this is the first Australian REIT study to report similar findings.

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Keywords

Equity Capital - Private Placement - a-Reits

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