The S&P/ASX 200 Index (ASX: XJO) is having a pleasing hump day so far this Wednesday. At the time of writing, the ASX 200 has gained a healthy 0.93%, which lifts the Index back over 7,000 points. But one ASX 200 property share isn't joining the party today. That would be National Storage REIT (ASX: NSR).
National Storage is a real estate investment trust (REIT) that primarily focuses on providing storage services. Yesterday, this property share closed at $2.51 per unit.
And that's the price it will be staying at, at least for a while. That's because National Storage announced a trading halt just before market open this morning. This means its shares are currently suspended from trading.
According to the REIT, this trading halt has been requested in order to allow National Storage to undertake a capital raising program.
National Storage units freeze on capital raising announcement
The REIT has announced the commencement of a fully-underwritten institutional placement of shares, as well as a security purchase plan. The institutional placement is intended to raise $300 million in funding, with up to an additional $25 million from the share purchase plan.
For the institutional placement, eligible investors will receive additional shares within a range of $2.33 and $2.41 per unit. This will be determined by a 'bookbuild' system.
For ordinary investors, Australian and New Zealand shareholders that owned National Storage units as of close of market yesterday (21 March) will be eligible for the security purchase plan. This will allow the purchase of up to $30,000 in new shares per investor. The price offered will be the same as determined for the institutional placement.
Here's what the company said about what it intends to use the raised funds for:
The Equity Raising is being undertaken to support the delivery of NSR's growth strategy by replenishing its investment capacity and providing additional funding flexibility for future acquisition opportunities and to underwrite the development pipeline going forward.
The proceeds from the Equity Raising will be used to fund NSR's committed and future acquisitions and its committed development spend, repay debt, including drawn facilities that are due to expire in 1H FY24, and strengthen the balance sheet.
So if you're wondering why you can't buy or sell national Storage units today, there's your answer. It will be interesting to see what the markets make of this REIT's news when the shares resume trading later this week.
