Filling up the trolley

The Australian real estate investment trust sector has found more joy in the market, pulling off another capital raising in a tough climate after the RBA's surprisingly large rate reignited interest in property investments.

Shopping centre owner CFS Retail Property Trust, which was hoping to raise $200 million through an institutional placement, has exceeded its expectations by raising an extra $125 million.

CFS, which announced the offer on Wednesday, completed its institutional placement of 162.5 million shares at a price of $2 a share to raise $325 million at a discount rate of 10 per cent to the pre-issue price.

The offer was fully underwritten by JPMorgan and Goldman Sachs.

The extra cash will come in handy for CFS, which needs to maintain its gearing levels of about 25 to 30 per cent. Indeed, A-REITs across the board are looking to cut their dependence on existing debt facilities

CFS, which is the third largest A-REIT in the market, has made the most of its strong market position to come through with a positive result.

Sales at CFS's shopping centres have held up well so far, and it has kept its outlook unchanged and maintained its projected distribution target of 12.5 cents a unit for the year to June 30, 2009.

CFS says the funds will be also used to fund projects in its $1.6 billion development pipeline. CFS is also going to give retail investors a chance to buy shares under a proposed unit purchase plan