land-ends-merge-asx-200-mid-week-feature
Two mergers made news this week. Image: Canva.
  • ALE Property approached by Charter Hall consortium
  • AOF merger ratio agreed: 54% to 46% AOF/DPF
  • URF announced the full repayment of the Global Atlantic Bridge Loan

Welcome back to the mid-week ASX-listed real estate wrap, and since we last reported, the market has moved somewhat.

The annual reports have been mostly positive across the board, and with a still booming real estate industry, it comes as no surprise most companies made investors smile.

Several major transactions and IPOs punctuated the financial year to date, from proptech platforms such as Openn Negotiation (ASX: OPN), through to HomeCo’s HomeCo Daily Needs REIT (ASX: HDN) and the soon to IPO HealthCo (ASX: HCW).

Centuria and Primewest came together to become one of Australia’s largest ASX-listed real estate fund managers behind Dexus (ASX: DXS), Charter Hall Group (ASX: CHC), and Goodman (ASX: GMG).

The broader market

At the time of writing, the ASX200 was trading at 7.322.60

asx-200-mid-week-22-09-chart
Image: Google.
That’s down from earlier this week when the market opened at 7,390.40. It’s also still lower than the August and early September highs, when the market traded above 7,500, and above 7,600 at one point.

At the time of writing, the top overall performers are mostly in the resources sector including Champion Iron, Beach Energy, and Nickel Mines. Sims Limited topped the list and Worley was number five.

Top-performing ASX listed real estate company shares: 22 Sept 2021

Company Code Price Change (%)
Acumentis ACU 0.155 +10.71
HomeCo HMC 8.30 +3.88
Lifestyle Communities LIC 21.55 +3.16
Charter Hall Social Infrastructure REIT CQE 3.765 +2.87
Arena REIT ARF 4.34 +2.84

Source: ASX

In addition to the top performers, the bottom five (from fifth lowest to lowest) were:

Least-performing ASX listed real estate company shares: 22 Sept 2021

Company Code Price Change (%)
US Masters Residential Property Fund URF 0.35 -1.41
Ultima United UUL 0.88 -1.68
Sunland Group SDG 2.43 -2.02
Proptech Group PTG 0.615 -2.38
Openn Negotiation OPN 0.185 -2.63

Source: ASX

The movement

The week opened with an update from Australian Unity Office Fund (ASX: AOF). The merger of AOF and Australian Unity Diversified Property Fund to create Australian Unity Property Fund has reached in principle agreement on a merger ratio (if the merger proceeds) AOF unitholders will own 54% (in aggregate) of Australian Unity Property Fund, and Diversified Property Fund unitholders will own 46%.

Monday also saw news Charter Hall had approached ALE Property Group (ASX: LEP) in July this year in a bid to buy out the company. Managed by Charter Hall Group (ASX: CHC), the consortium includes Charter Hall Long WALE REIT (ASX: CLW) and Hostplus.

The consortium will acquire 100% of LEP securities, with security holders to expect $5.68 per LEP security, comprising $3.673 cash per LEP security, and 0.408 CLW securities per LEP security. The total enterprise value consideration, including transaction costs, is approximately $1.68 billion (100% basis).

Irongate Group (ASX: IAP) also announced the completion of its Morningside acquisition.

On Tuesday, US Masters Residential Property Fund (ASX: URF) announced the full repayment of the Global Atlantic Bridge Loan. As foreshadowed in URF’s 30 June 2021 Half Year Report, on 20 September 2021 (US local time) URF processed an early, optional full repayment of the Fund’s Bridge Loan with Global Atlantic Financial Group.

Following this repayment, the Fund’s remaining debt sits entirely within the Global Atlantic Term Loan facility, which as of 20 September 2021 had a balance of US$349.9 million. The Term Loan carries a fixed interest rate of 4.00% with a maturity date in mid-2026.

Meetings and distributions

Upcoming AGM’s announced:

Company Code Date
Fletcher Building FBU Tuesday, 19 October 2021
Stockland SGP Tuesday, 19 October 2021
Peet PPC Tuesday, 16 November 2021
Arena REIT ARF Thursday, 25 November 2021
GARDA Property Group GDf Thursday, 25 November 2021
Growthpoint Properties Australia GOZ Monday, 22 November 2021
Hotel Property Investments HPI Wednesday, 17 November 2021
Dexus DXS Tuesday, 19 October 2021

Distributions/Dividends announced for September quarter:

Company Code Amount
ALE Property Group LEP $0.055
Arena REIT ARF $0.0395
Australian Unity Office Fund AOF $0.038
Charter Hall Social Infrastructure REIT CQE $0.04175
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