This article is from the Australian Property Journal archive
THE Australian Unity Office Fund (AOF)’s five assets have had $6 million shaved off their collective value to $310 million, while the weighted capitalisation rate lifted by 0.71%.
Its five assets, which include the 14-level A-grade tower at 10 Valentine Avenue in Parramatta that major tenant Property NSW has exited, were independently valued for the six months to the end of June and saw the weighted capitalisation rate increase from 5.74% to 6.45%.
“AOF’s independent valuations represent fair value for the profile of the fund’s assets, including updated capital refurbishment costs for 10 Valentine Avenue Parramatta, following the tender process,” AOF fund manager Nikki Panagopoulos.
AOF had been looking for a tenant to replace Property NSW at the tower after the state government body made the decision to exit.
Late last year, it offloaded 30 Pirie Street in Adelaide for $73 million after anchor Telstra chose to up and leave after three decades, and then went on to offload the office and warehouse complex at 2 Eden Park Drive in Macquarie Park for nearly $69 million, at a 10% premium to book value.
AOF last year 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.
Office building owners down under have been bracing for the latest round of valuations as they saw their offshore counterparts suffer under the weight of structural changes to the workplace. CBD buildings are considered to be more heavily affected as working-from-home has become the norm – Dexus’s office towers had 7.7% wiped from their value and Charter Hall had 3.7% from the value of its office portfolio – although Centuria Office REIT took a 4.4% haircut on the value of its portfolio of inner city and metropolitan buildings.
AOF yesterday confirmed its sweetened June quarter distribution of 25.0c per unit, higher than the 22.5c per unit guidance provided in April, and comprises an ordinary distribution of 2.5c and special distribution of 22.5c.
