Australian Unity Real Estate Investment (AUREI) has achieved a $13.7 million increase in the value of the portfolio since listing its Australian Unity Office Fund (AOF).
The increase was due to the external valuation of four of AOF’s eight properties as at 31 December 2016: 468 St Kilda Road, Melbourne; 32 Phillip Street, Parramatta; 2 Eden Park Drive, North Ryde; 64 Northbourne Avenue, Canberra.
Since listing in June 2016, the fund has also completed approximately 5,400 sqm of leasing, with a further approximate 3,800 sqm subject to signed heads of agreement. Combined, this equates to over nine percent of the portfolio.
Grant Nichols, fund manager of AOF, said “The increase in property values has been generated from a general tightening of capitalisation rates resulting from comparable market transactions, combined with positive leasing outcomes across a number of properties.”
“We continue to see solid tenant demand, particularly for sub-1,000 sqm tenants in most of the markets that AOF is invested in. Combined with ongoing strong demand for Australian office investment, we expect current valuation levels to continue to be well supported,” he said.
The valuations increase AOF’s net tangible assets (NTA) by approximately 9.8 cents per unit. The weighted average capitalisation rate across the portfolio tightened to 7.8%.
At 2 Eden Park Drive, North Ryde, the valuation increased by 16% over the preceding book value. Much of this increase was driven from the leasing success achieved since listing, where a number of new leases and lease renewals have been completed at an average rent 12% above the prior valuation market rent.
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About the Australian Unity Office Fund (AOF).
AOF is an ASX-listed REIT that wholly owns a diversified portfolio of eight office properties located across Australian metropolitan and CBD markets in Sydney, Adelaide, Melbourne, Brisbane and Canberra.