This article is from the Australian Property Journal archive
THE Australian Unity Office Fund (AOF) is down to one last asset, after it found a buyer for its 64 Northbourne Avenue office building in Canberra and has taken a 35% plus haircut from the peak book value.
The fund has sold the Canberra office for $21.2 million – a circa 10% discount to its book value and well below its peak value of $32.50 million in June 2022.
Following settlement of the sale, in November, the fund’s responsible entity Australian Unity Investment Real Estate Limited (AUIREL) intends to terminate AOF’s debt facility and declare a special distribution of at least 9c per unit.
The sale of 64 Northbourne Avenue leaves 468 St Kilda Road in Melbourne as the only asset held by AOF, and follows last month’s divestment of a refurbished vacant Parramatta office tower and adjacent car park for $80.5 million – nearly $70 million less than what the asset was valued at just two-and-a-half years ago – just a few months after it pitched plans for a 68-storey build-to-rent tower on the expansive CBD site.
The AOF asset sales have included 94-96 York Street in Beenleigh for $29.7 million, below what AOF paid in 2021 when it bought the then-new building for $33.52 million, and 150 Charlotte Street in Brisbane for $64.5 million. That price came in above the book value of $60 million, but represented a hefty capital loss for AOF, which paid $105.75 million in 2017 when it acquired the Brisbane CBD office building.
64 Northbourne Avenue was valued at $23.55 million at the end of June.
“AUIREL will continue discussions with prospective buyers regarding the potential sale of 468 St Kilda Road, Melbourne,” AUIREL said.
Unless and until AUIREL makes the determination to dispose of AOF’s main undertaking and has obtained AOF unitholder approval to do so, AOF is unable to return to unitholders any proceeds from the sales of 2-10 Valentine Avenue, Parramatta (settlement of which is expected in March 2025) and 150 Charlotte Street, Brisbane (settlement expected in April 2025).
“Subject to the progress of those discussions, market conditions, and any superior proposal, AUIREL currently intends to make a determination to dispose of its main undertaking (including the distribution to unitholders of proceeds of relevant asset sales) and seek unitholder approval to do so in accordance with ASX Listing Rule 11.2.,” it said.
