Hansteen Holdings, the London based industrial property company, is planning to take advantage of “exceptional opportunities” in the UK industrial property sector by raising £194.6 million ($316.3 million; €227.4 million) through the sale of shares.
In an announcement to AiM, London’s junior stock exchange, today, Hansteen said it raised the equity through broker KBC Peel Hunt by means of a placing and open offer at 75 pence a share, a discount of 7 pence a share to the closing price on Monday of 82 pence a share.
The majority of the shares will be offered to the open market with approximately one third reserved for existing shareholders and about 15 new institutions. Hansteen said the firm would double in size as a result of the deal, which could lead to it applying to list on the senior stock exchange within the next 12 months.
In its announcement, Hansteen said: “The difficult economic conditions, restricted availability of financing and sharply falling property values currently being experienced in the UK market following a sustained period of rising values and plentiful availability of debt has created a state of considerable distress in the UK property market.”
The firm said that it would be able to complete industrial property acquisitions at “double digit” initial yields . “This has led the directors to conclude that there is an outstanding opportunity to create value for Hansteen’s shareholders by re-entering the UK industrial property market at this time.” Much of its existing property is in continental Europe.
The firm added that it was in a suitable position to enact its strategy because it had “no current balance sheet constraints” and that is had “no need” to raise capital or sell assets from its portfolio, valued at €495 million as of 31 May.
It also said: “Hansteen is conservatively geared with substantial headroom on its banking covenants.”
Hansteen’s move to raise equity via new shares has become indicative of late of listed companies not disabled by their debt obligations or faltering loan to value covenants, which are stretching themselves to take advantage of the downturn in property prices throughout the UK.