This article is from the Australian Property Journal archive
TONY Pitt's 360 Capital Group has launched a bid to overthrow Centuria Property Funds as the responsibility of the $113.2 million Centuria Diversified Direct Property Fund, and that is just the start.
Formerly known as the Becton Diversified Direct Property Fund, Centuria won control of the fund in September 2010.
Pitt said Centuria, which owns only 0.01% of the fund, has received in excess of $1.7 million in fees in FY13.
“As the largest unitholder in the fund, holding 19.9%, in order to protect unitholder value, 360 Capital has no option but to seek to remove Centuria as responsible entity due to Centuria’s persistent refusal over three years to provide promised liquidity to all unitholders in the fund.
“Since Centuria’s appointment as responsible entity in 2010, distributions to unitholders have halved, reducing from 8.00cpu p.a. to a forecast of 4.00cpu p.a. for FY15, and the fund’s NTA per unit has also reduced, despite a rising property market over this period,” he added.
“This lack of promised liquidity and decline in unitholder value is not acceptable to 360 Capital,” he continued.
Pitt said a number of other unitholders in the fund support 360 Capital’s proposal to change the responsible entity and provide liquidity in order to improve total returns.
“As an indication, if appointed responsible entity of the fund, 360 Capital will purchase the units from the second largest unitholder of the fund taking its overall stake to 25.8%,” he proposed.
“360 Capital’s investment philosophy is to co-invest alongside its unitholders and it now has in excess of $125.0 million of capital committed to co-investment across its $1.1 billion platform. 360 Capital has a strong track record of listening to unitholders requests and has now provided a liquidity opportunity across all funds and trusts it manages,” he added.
A meeting has been convened on October 07.
Pitt said 360 Capital is also seeking liquidity for unitholders in other Centuria managed funds where 360 Capital has an investment.
Meanwhile Centuria’s CEO John McBain has refuted Pitt’s comments and said certain claims were inaccurate.
“Distributions to investors since CPFL’s appointment as responsibility entity in September 2010 have not halved. Distributions to Investors were increased by 33% from 6.0 to 8.0 cpu per annum from 1 January 2011.
“Distributions were paid at a rate of 8.0 cpu for two and a half years until the sale of an asset in the portfolio in April 2013. CPFL maintained a 7.0cpu per annum distribution throughout FY14 even after that sale,” McBain said.
“Due to the ongoing asset sale programme, the associated return of capital and the long advised vacancy at 2 Faulding St Symonston, distributions for the September 2014 quarter are forecast at 4.0 cpu per annum. Future distributions will be dependent on the timing of the ongoing asset sale programme,” he added.
McBain said the Fund’s NTA per unit has not decreased since Centuria’s appointment in 2010, after the capital returns to investors in 2013 and 2014 are taken into account.
Australian Property Journal
