Potential Dilution Looms as 360 Capital Mortgage REIT Launches Unit Purchase Plan
360 Capital Mortgage REIT (ASX: TCF) has launched a Unit Purchase Plan offering eligible unitholders the chance to invest up to A$30,000 in new units at a price aligned with the Trust’s net asset value. The offer aims to bolster the Trust’s capacity to invest in commercial real estate loans.
- Unit Purchase Plan open from 27 May to 24 June 2025
- Issue price set at A$5.94 per unit, equal to NAV as of 30 April 2025
- Up to A$30,000 investment per eligible unitholder without brokerage fees
- Proceeds targeted for new and existing commercial real estate loan investments
- Non-renounceable offer with potential scale-back at Responsible Entity’s discretion
Unit Purchase Plan Launch
360 Capital Mortgage REIT (TCF) has announced a Unit Purchase Plan (UPP) that invites eligible unitholders to apply for new fully paid ordinary units worth up to A$30,000 each. The offer opens on 27 May 2025 and closes on 24 June 2025, providing a window for investors to increase their exposure to the Trust without incurring brokerage or transaction costs.
The issue price for the new units is set at A$5.94 per unit, which represents a slight discount to recent trading prices and is equal to the Trust’s net asset value (NAV) as at 30 April 2025. This pricing strategy aligns with the Trust’s April 2025 Entitlement Offer, maintaining consistency for investors.
Strategic Use of Proceeds
The capital raised through this UPP is earmarked for investment in new and existing commercial real estate loan opportunities. This focus is consistent with the Trust’s strategy to provide investors with access to credit secured by Australian real estate assets, aiming to deliver stable monthly income through disciplined asset selection and risk management.
By raising additional capital, 360 Capital Mortgage REIT seeks to enhance its lending capacity, potentially increasing its portfolio and income-generating assets. The forecast distribution yield for FY25 stands at an attractive 10.4%, reflecting the Trust’s income-focused approach.
Participation Details and Conditions
Eligible unitholders are those registered at 7.00pm (Sydney time) on 22 May 2025 with addresses in Australia or New Zealand. The offer is non-renounceable, meaning unitholders cannot transfer their entitlement to others, and participation is entirely voluntary. Applications can be made via BPAY® or electronic funds transfer (EFT), with no application form required for BPAY® payments.
The Responsible Entity reserves the right to close the offer early or scale back applications at its absolute discretion, particularly if the offer is oversubscribed. Any scale-back would be conducted on a pro-rata basis to ensure fairness among participants.
Market and Investor Implications
The UPP offers an accessible opportunity for existing investors to increase their holdings at a price reflective of the Trust’s underlying asset value. The absence of brokerage fees further incentivizes participation. However, investors should be mindful of the potential dilution effect and the possibility that the market price of units may fluctuate between the offer announcement and the issue date.
New units issued under the plan will rank equally with existing units and are expected to commence trading on the ASX on 2 July 2025. This seamless integration supports liquidity and market confidence in the Trust’s securities.
Bottom Line?
As 360 Capital Mortgage REIT seeks to expand its lending footprint, investor response to this Unit Purchase Plan will be a key indicator of market confidence and the Trust’s growth trajectory.
Questions in the middle?
- Will the Unit Purchase Plan be fully subscribed or subject to scale-back?
- How will the additional capital raised impact the Trust’s loan portfolio and risk profile?
- What market conditions might influence unit price performance post-issue?
