This article is from the Australian Property Journal archive
THE Australian Unity Office Fund (AOF) has furthered its asset selldown program, offloading a Northern Sydney office and warehouse complex for nearly $69 million, at a 10% premium to book value.
The sale of 2 Eden Park Drive in Macquarie Park comes hot on the heels of its $73 million of the 30 Pirie Street property in Adelaide, where Telstra chose to end its lease of more than three decades.
Settlement of the Macquarie Park sale is conditional on the purchaser finalising financial documentation and is expected in February with net proceeds initially used to pay debt.
Nikki Panagopoulos, AOF fund manager, said the sale followed the receipt of a number of unsolicited offers and an off-market process.
“The sale, at a material premium to the asset’s independent valuation, represents a compelling opportunity for AOF to realise capital while also reinforcing the quality and value of AOF’s portfolio.
“The sale is consistent with AOF’s previously announced value maximisation strategy.”
The property was sold off market by Carl Molony of Stonebridge Property Group.
AOF saw $48.4 million full-year loss as valuations of its office buildings at the close of FY22 took a hit after three major tenants, including Telstra, decided not renew their leases. The result follows a $23.2 million profit last year and the collapse of talks with potential suitor Aliro Group over a $403 million buyout after an extended period of due diligence.
AOF then moved to divest three of the three assets within its portfolio, including 150 Charlotte Street in Brisbane, 90-96 York Street in Beenleigh and 64 Northbourne Avenue in Canberra.
Panagopoulos said that following the anticipated settlements, AOF’s balance sheet position would also provide an opportunity to consider the potential to return capital to unitholders through a special distribution.
He said AOF would continue to assess its portfolio and remains open to consider further asset sales that maximise value for unitholders, and would continue to focus on leasing activity, and refurbishment opportunities, including at 10 Valentine Avenue, Parramatta where make-good works have commenced.
AOF’s plans to merge with Australian Unity Diversified Property Fund were knocked back by investors earlier this year, scuppering the creation of a $1.1 billion portfolio. Shareholders had also thwarted a takeover bid from Charter Hall and Abacus Property Group in late 2019.
AOF said at the start of the year it was having discussions with suitors and that it was set to appoint agents to solicit sale proposals for its then-$586 million portfolio of metropolitan and CBD office buildings.
