Merger of AUI property fund approved by investors

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Investors in Australian Unity Investments’ (AUI) Second Industrial Trust (SIT) have voted in favour to merge with AUI’s Office Property Fund (OPF) at a meeting of investors in Melbourne today (Friday 24 May 2013).

The proposal to merge the two funds was developed by AUI, creating a $360 million property fund holding commercial properties in Sydney, Melbourne, Adelaide, Brisbane, Canberra, and Perth.

Mr Mark Pratt, AUI’s head of property, mortgage and capital markets, said investors strongly supported the proposal, with 89.8 per cent voting in favour.

“Australian Unity Funds Management, as the responsible entity, developed the proposal because it believes a merger of the two funds is in the best interests of SIT investors, as well as the existing investors in OPF.

“SIT was a closed-end syndicate that was due to terminate in June 2014. Through the merger we are providing investors an opportunity to maintain their exposure to quality commercial property investments, better diversify their property exposure, and have the opportunity to defer capital gains tax (CGT) on their investment.

“Having spoken with a number of investors, many of them expressed a desire to maintain their investment in the Australian property market beyond SIT’s scheduled termination,” Mr Pratt said.

As part of the proposal, investors in SIT will be offered an initial $5.7 million capped withdrawal offer equating to approximately 25 per cent of SIT’s forecast net asset value at the withdrawal offer date.  This is in addition to around 46 cents per unit already returned to SIT unitholders since December 2006.

As at 30 April 2013, the Office Property Fund has returned 6.01 per cent over six months, 11.03 per cent over one year, 6.96 per cent over two years and 7.03 per cent over three years. If the proposal goes ahead, the combined fund is expected to have an occupancy rate of 93.28 per cent and a strong weighted average lease expiry of 4.67 years.

Australian Unity Investments is the funds management arm of Australian Unity – a national healthcare, financial services and retirement living organisation. A mutual organisation operating for over 170 years, Australian Unity provides services to some 620,000 Australians, including 320,000 members.

Australian Unity Investments offers a range of investment funds in domestic and international equities, fixed interest, mortgages and property. Its investment approach is to use its established in-house expertise in property and mortgages while also forming joint ventures and strategic alliances with boutique asset managers. The property funds management business has over $1.6 billion in funds under management (as at 30 April 2013). Its unlisted property funds and syndicates own more than 63 properties in the healthcare, retail and commercial sectors, in Victoria, New South Wales, Queensland, Australian Capital Territory, Western Australia and South Australia.

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For more information please contact:

Mark Pratt – Phone: 03 8682 4448

24 May 2013