Australian Unity Investments (AUI) has opened a limited priority rights offer for investors in its Diversified Property Fund at a 7.5 percent discount to the security price*, with a view to raising up to $40 million.
AUI committed to recapitalising the fund and re-establishing liquidity when it acquired the fund from Westpac Funds Management in September.
Mr Mark Pratt, AUI’s general manager – property, mortgages and capital markets, said that the capital raised will be used to strengthen the fund’s balance sheet by reducing debt, as well as improving liquidity for investors.
“The funds will allow us to offer investors the chance to participate in a series of three $10 million withdrawal offers over the next twelve months.
“Over time, we intend to establish a regular withdrawal program, similar to the successful arrangements in place for our other leading property funds such as the Healthcare Property Trust and Retail Property Fund.
“In addition, the money raised will allow the fund to invest in capital works for its properties, enhancing their capital value and improving their attractiveness to tenants.”
Mr Pratt added that the underlying property fundamentals of the fund are strong, with all properties recently valued and the portfolio currently 98.7 percent leased (as at 31 October 2010).
“Our view is that property valuations have generally stabilised and the fund is now well-positioned for future capital growth.
“For these reasons, we believe the offer of additional securities at a discounted price represents a good opportunity for investors,” Mr Pratt said.
The priority rights offer for existing investors will close on 22 December 2010. Depending on availability, securities will be offered to other investors at a 7.5 percent discount to the security price that would otherwise apply in that month. This public offer (if undertaken) will start on 3 January 2011.
The first withdrawal offer is now open, and will close on 13 December 2010. Investors can apply for part or all of their investment. If the total amount of the withdrawal requests exceeds the $10 million available, requests will be met on a pro-rata basis.
Australian Unity Investments is the funds management arm of financial services, health and retirement living services provider Australian Unity. It has more than $12.2 billion in funds under management (as at 31 October 2010). Its investment approach is to use its established in-house expertise in property and mortgages while also forming joint ventures and strategic alliances with other organisations with specialist expertise.
* Discount applies to the security price as at 30 September 2010
For more information please contact:
Mark Pratt – 03 8682 4448