30-pirie-st-adelaide-australian-unity-office-fund-feature
30 Pirie St, Adelaide. Image – AOF.
  • Merger originally announced in July this year
  • If successful, the merger is expected to be implemented before Christmas this year
  • AUPF will have a $1.2 billion diversified portfolio with approximately 97% occupancy

Australian Unity Investment Real Estate Limited (AUIREL), as the responsible entity for Australian Unity Office Fund (ASX: AOF), has announced a merger implementation deed with Australian Unity Diversified Property Fund (DPF); this will create the Australian Unity Property Fund (AUPF).

The move has been in the works for some time.

In July, Australian Unity Investment Real Estate Limited (AUIREL) Chairman, Peter Day, said that following a strategic assessment, the Board identified a potential merger of AOF and DPF.

At the time, the combined portfolio would include 18 assets, worth just under $1.2 billion across office, convenience retail, and industrial sectors.

aof-combined-portfolio
Image – AOF.

The portfolio would have an occupancy of approximately 96% and a weighted average lease expiry (WALE) of approximately 4.8 years.

Without the merger, AOF would have a 95.3% occupancy and WALE of 2.6 years, DPF an occupancy of 97.4% and WALE of 7.6 years.

The acquisition

Under the terms of the Merger, AOF will acquire all the units in DPF and issue new AOF units to DPF unitholders at the ratio of 0.455 AOF unit for every 1 DPF unitheld.

Following the merger, AOF unitholders will own approximately 54% of AUPF, and DPF holders 46%.

The merger is to be implemented by way of a DPF trust scheme, subject to judicial advice and obtaining various approvals at an AOF unitholder meeting that are required to facilitate the DPF Trust Scheme.

The companies noted that a notice of meeting and accompanying explanatory memorandum is expected around 15 November, with the meeting to be held some time on, or around 10 Devember.

Should all conditions be satisfied or waived, the implementation of the merger is expected to be on or close to 22 December this year.

“We are pleased to have reached this important milestone in the proposed merger of AOF and DPF,” said AOF Fund Manager, Nikki Panagopoulos.

“Since we first announced the intention to investigate the merger in July 2021, we have worked with DPF to develop a transaction structure that provides an opportunity for unitholders in both funds to benefit from the combined portfolio.”

“We believe exposure to a $1.2 billion diversified portfolio with approximately97% occupancy and 5 year weighted average lease expiry profile will provide unitholders with a superior investment proposition and sustainability of income.”

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