This article is from the Australian Property Journal archive
WHILE still posting a loss for the FY23 period, Australian Unity Office Fund’s (ASX: AOF) divestment of three assets at or above book value enabled the group to pay a special distribution and pay off its debt.
AOF posted a loss of $4.44 million for FY23, which was improved from a loss of $48.35 million in FY22.
FFO were at $19.3 million or 11.7 cents per unit, down from $30.84 million or 18.8 cents per unit in FY22.
Total distributions were declared at $53.4 million or 32.5 cents per unit, up from $24.98 million in FY22 or 15.2 cents per unit.
“AOF continues to fulfill its investment objective of maximising returns for unitholders with three assets sold during the year at or above the independent valuation, allowing the fund to pay a special distribution of 22.5 cents per unit and total distributions for the year of 32.5 cents per unit,” said Nikki Panagopoulos, fund manager at AOF.
Net tangible assets were at $1.91 per unit, down from $2.26 per unit at 30 June 2022.
All assets were revalued in the six months to 30 June 2023, resulting in a portfolio value of $310.4 million, weighted average capitalisation rate of 6.45% and value per square metre of net lettable area of $6,354 and an NLA of 48,854sqm.
AOF’s portfolio occupancy was at 92.5% excluding assets under refurbishment or 63.0% for all assets, with a WALE of 2.8-years.
“Refurbishment works at 10 Valentine Avenue, Parramatta are progressing and we remain focused on maximising returns for unitholders and will continue to be proactive in terms of portfolio construction, asset sales and active asset management,” added Panagopoulos.
AOF divested three assets over the period at or above 30 June 2022 independent valuations, with the circa $220 million in proceeds used to repay debt and fund the special distribution.
The divestments included 30 Pirie Street in Adelaide for a gross sale price of $73.0 million, 2 Eden Park Drive in Macquarie Park for $68.8 million and 5 Eden Park Drive, also in Macquarie Park, for $80.75 million.
Gearing was at 0% with no drawn debt and $81 million of unused debt facility, which is due to expire in March 2025.
The 30 June 2023 interest cover ratio was 5.2 times against a minimum 2.0 times covenant and Loan to Value ratio was 0% against a 50% maximum covenant.
AOF has provided a distribution guidance 1.30 cents per unit for the September 2023 quarter.
