By Ben Wilmot
The small listed office fund managed by Australian Unity will wind up after it struck a deal to sell its last asset, on Melbourne’s St Kilda Road, for a net price of just over $40m.
The trust’s units fell by about 12 per cent to $1.06 on the news despite the strategy to wind up the fund being supported by investors, including funds manager Geoff Wilson and corporate agitator Nick Bolton, backed by media investor Antony Catalano, earlier this year.
Part of the drop in the share price came as the company traded ex a 9c c distribution, showing a smaller impact from the announcement.
The manager said it would dispose of the fund, AOF’s, main undertaking and would call an extraordinary general meeting to win investor approval to bring the trust to a close, once the property sales it had made were settled.
The move comes as the group agreed to terms for the sale of 468 St Kilda Road in Melbourne with funds manager Bayley Stuart Capital. The deal will see the listed trust reap estimated net proceeds, excluding disposal costs, of $41.75m. But the parties declined to comment, though the headline price was reportedly closer to $50m.
The plan also includes the return of net proceeds to AOF unitholders from the earlier sales of 2-10 Valentine Avenue, Parramatta, and 150 Charlotte Street in Brisbane.
Australian Unity said that investors in the office fund would receive aggregate proceeds of between $1.20 to $1.23 per unit. This includes a special distribution from the sale of 64 Northbourne Avenue, Canberra of 9c per AOF unit, which was announced earlier this week.
The meeting will be held on December 19.
The sale price of the St Kilda Road asset shows that times remain tough in Melbourne’s fringe office market as it was independently valued at the end of June at $62m.
AOF’s net tangible assets at that time were $1.39 per unit, which excluded expected disposal costs of about 2c per unit.
The Melbourne office sale is being handled by Colliers’ John Marasco, Matthew Stagg, Anna Cavar and Knight Frank’s Trent Preece and Ben Schubert.
The building on the northern end of St Kilda Road has views of Albert Park and Port Phillip Bay. It sits on a prime 2318sq m site within a commercial 1 zone and is about two kilometres south of Melbourne’s CBD and near the upcoming ANZAC Station, which is set to open in 2025.
Comprising a 14-storey structure with ground floor retail, 13 upper office levels, and two basement carpark levels, the building spans a net lettable area of 11,210sq m. It was about three-quarters occupied and the buyer is expected to bring tenants into the empty spaces to boost its income.
Licensed by Copyright Agency. You must not copy this work without permission.
