Daily ASX wrap: 25 July 2022

• The Agency settled its acquisition of Bushby Property Group
• Aliro advised AOF that it is unable to submit an updated proposal at this time
• USQ valuations came in at US$144.6 million or circa A$210 million

After a stunning week of footy, and Machester United kicking off in the West, does the ASX have a hangover to match?

The broader market

The ASX200 closed today at 6,785.10 points, down almost 1% today. For July, the market is up 3.7% or 245.2 points.

The market was led by a veritable mix of companies, the top five performers included two insurance companies: Insurance Australia Group (ASX: IAG) and Steadfast Group (ASX: SDF), along with REIT Unibail-Rodamco-Westfield (ASX: URW), Corporate Travel Management (ASX: CTD), and Nickel Industries (ASX: NIC).

Top-performing ASX listed real estate company shares: [DD Month] 2022

Source: ASX

The movement

The morning kicked off with an update from Auctus (ASX: AVC), with its US Student Housing REIT (ASX: USQ) recently undergoing valuations. USQ all assets except for the recently acquired Lofts on 8th at Arizona State University, independently valued by CBRE for 30 June 2022, with the resulting GAV of the portfolio of 9 properties increasing to US$144.6 million or circa A$210 million.

The revaluations are up from US$136.9 million. The portfolio is also 92.3% pre-leased, with current pre-leasing ahead of the prior year’s figures by 16.1%.

AVC also held a meeting regarding the return of capital to shareholders today, with shareholders voting 99.79% for the motion. AVC said the capital return totals approximately $3.93 million.

Australian Unity Office Fund (ASX: AOF) today announced that Aliro has withdrawn its takeover bid for AOF. The company originally made its proposal at the end of May, but has now advised AOF that it is unable to submit an updated proposal at this time.

In the market announcement, Aliro noted a deterioration of market conditions was a factor in being unable to arrive at an offer price that was suitable for both Aliro and AOF unitholders.

AOF also released details of its portfolio valuations today, with independent valuations received for seven of the company’s assets.

The valuations reflected a decrease of $37.25 million from the prior independent valuations. The company said this was mainly due to two assets: 30 Pirie Street in Adelaide and 2-10 Valentine Avenue in Parramatta.

The Adelaide property saw a $16 million decrease to $73 million, with AOF stating the valuation “reflects increased capital expenditure allowances which will be required to refurbish the building following the expiry of Telstra’s lease in February 2023.”

The Parramatta property valuation dropped by $22.55 million to $98 million, AOF said this was due to a change in valuation methodology.

More details on AOF here.

Earlier this month, The Agency (ASX: AU1) announced it would acquire Tasmanian real estate business Bushby Property Group. The $5 million deal would see the one of the oldest family-owned real estate businesses join AU1. Today, AU1 confirmed the settlement of the Bushby acquisition.

In other news from The Agency, the company said that, subject to shareholder approval, it has agreed to extend the maturity date of the company’s pre-existing convertible notes with Peters Investments.

As at 30 June 2022, The Agency had $3.6m of convertible notes on issue to Peters Investments. The maturity date extension will be made to 22 January 2026.

The Agency has also agreed new terms with Macquarie Bank Limited. AU1 said it has entered into an amendment deed in respect of its primary secured debt facility with Macquarie, with the total facility limit increased to $8.4 million, the interest rate to remain at 3.75% per annum + 30 days BBSW, among other amendments.

That’s the latest in ASX-listed real estate.