Qualitas real estate fund offers to raise up to $266m

13 September 2019

The responsibly entity (RE) of the Qualitas Real Estate Income Fund, the Trust Company has announced an entitlement offer to raise up to $266 million of new capital for the trust which will be earmarked for “capturing opportunities identified in its lending pipeline”.

“As the banks continue to retreat from commercial real estate lending, alternative credit providers are increasing their market share. We are seeing continued demand for predominantly senior loans to be used for investment, construction and land financing,” he said.

“By increasing the capital base of QRI, we will be able to take advantage of these investment opportunities.”

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The entitlement offer would be an accelerated, non-renounceable, pro rata offer of one new fully paid ordinary unit for every one existing unit in the Trust to existing eligible unitholders at an offer price of $1.60 per new unit. If there was a shortfall under the entitlement offer, the shortfall could be placed at the discretion of the RE to new wholesale and retail investors, the firm said.

Also, the manager said it would recognise the importance of deploying this new capital in an appropriate timeframe and, to ensure alignment of interests with unitholders, it would reduce the management fee by 50% on the capital raised in the entitlement offer until it was invested.

QRI aimed to deliver stable monthly cash income generated by a portfolio of commercial real estate loans, secured by predominantly first mortgages, and to a lesser extent, second mortgages.

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