Paragon REIT faces "trading conditions that constrain potential for sustained growth", say offerors.

Unitholders of Paragon REIT have approved the 98 cents per unit privatisation offer by Cuscaden Peak Investments by an overwhelming vote.

At a scheme meeting held earlier today, unit holders representing 97.57% by value and 82.78% by headcount gave the go-ahead.

The offer of 98 cents per unit represents 1.07 times price/adjusted NAV, and is at a 10.9% and 12.8% premium over the one-month and 12-month volume-weighted average prices.

Cuscaden Peak, held by Mapletree Investments and CLA Real Estate Holdings, became the sponsor of Paragon REIT in April 2022, after the completion of the acquisition of Singapore Press Holdings' non-media assets.

Paragon REIT owns a portfolio of retail properties anchored by the shopping mall Paragon, alongside The Clementi Mall and Westfield Marion Shopping Centre in Australia.

According to the offerors, Paragon REIT faces "trading conditions that constrain potential for sustained growth" and is heavily reliant on Paragon, which accounts for 72% of the REIT's appraised value.

To "future proof" Paragon, the Cuscaden Peak expects to potentially spend $300 million to $600 million to refurbish the mall, which will take between three to four years to complete.

The REIT's last trading day will be on or around May 14 and unit holders will receive their money on or around June 4 and the REIT will be delisted on or around June 6.