Prime US REIT Locks In US\$25 Million Through Private Placement: What Investors Must Know About the Deep Discount, New Units, and Distribution Impacts

Prime US REIT (SGX: OXMU) has successfully closed its latest private placement, raising approximately US\$25 million at a significant discount to its recent trading price. This move, managed by Prime US REIT Management Pte. Ltd., could have substantial implications for existing and prospective investors.

Key Highlights of the Private Placement

• Gross Proceeds: US\$25.0 million raised via private placement.
• Issue Price: US\$0.1935 per new unit, at the bottom end of the previously announced range (US\$0.1935–US\$0.2000).
• Units Issued: 129,199,000 new units will be issued.
• Discount to Market:
  • 10.0% discount to volume weighted average price (VWAP) of US\$0.2150 per unit.
  • 9.0% discount to adjusted VWAP of US\$0.2126 per unit, after subtracting the Advanced Distribution.
• Investor Participation: Good demand from a mix of new and existing long-only funds, private wealth, and multi-strategy investors.
• Trading Commencement: New units expected to begin trading on SGX-ST at 9:00 a.m., 6 October 2025.

Critical Shareholder Information & Price Sensitive Points

• Dilution Risk: The issuance of 129.2 million new units will increase the total unit count, leading to potential dilution for existing shareholders. This is a material development that could impact per-unit earnings, distributions, and share price.
• Distribution Exclusion: Holders of these new units will not be entitled to any distributable income accrued prior to their issuance, specifically the Advanced Distribution and the 1H2025 Distribution. Existing holders will retain their rights to these distributions, but new investors will only participate in future distributions from the date of issue onwards.
• Listing Approval: The placement is subject to SGX-ST’s in-principle approval for the listing and quotation of the new units. An announcement will follow once approval is received. Any delay or complications in approval could affect trading plans and investor sentiment.
• No Major Shareholder Changes: As of the announcement date, no director, CEO, or unitholder holds 20% or more of the total units, suggesting no major change in control.
• Strong Institutional Demand: Placement saw robust interest from long-only funds, private wealth, and multi-strategy investors, signaling confidence from institutional capital despite the discount.

Additional Investor Considerations

• Regulatory Notice: The new units are classified as prescribed capital markets products and Excluded Investment Products under Singapore regulations. This may affect their suitability for certain investor categories.
• Liquidity and Risk: While the REIT is listed on SGX-ST, liquidity is not guaranteed. Units can only be traded on the SGX-ST and are not redeemable by the manager.
• Market Risk Warning: Past performance is not indicative of future results. Investment in the REIT carries risk, including potential loss of principal.
• No US Offering: The securities are not offered in the United States, Canada, Japan, or the European Economic Area. The placement is not registered under the US Securities Act.

Implications for Shareholders and Potential Price Impact

This private placement is a material event for Prime US REIT:

• The deep discount may exert short-term pressure on the unit price, as new units enter the market at a below-VWAP level.
• Potential dilution from the enlarged unit base may impact per-unit performance metrics and investor returns.
• Institutional demand is a positive signal, but individual investors should monitor trading post-listing for volatility.
• Distribution exclusions for new units may affect short-term distribution yields for incoming investors.
• Shareholders should watch for the SGX-ST listing approval announcement, as any delay could affect sentiment.

Conclusion

Prime US REIT’s US\$25 million private placement is a significant development with immediate and longer-term implications for share price, distributions, and investor composition. The substantial discount and strong institutional demand highlight both opportunities and risks for shareholders, making this one of the most pivotal REIT capital events of 2025.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell any securities. All investments carry risks, including the risk of loss. Investors are encouraged to conduct their own research and consult with their financial advisors before making investment decisions. The information herein is based on public announcements and may be subject to change. This article has not been reviewed by the Monetary Authority of Singapore.

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