The Australian Unity Office Fund (ASX: AOF) told investors at today’s annual general meeting that the Fund is well placed to deliver on its objective of providing unitholders with sustainable income returns.
The annual general meeting reiterated AOF’s strong performance and highlighted its 22.1 percent total return1 to unitholders based on change in net tangible assets plus distributions.
In FY17, AOF generated Funds From Operations of $24 million or 17.1 cents per unit, which was approximately $900,000, or 0.7 cents per unit greater than the Product Disclosure Statement (PDS) forecast of $23.1 million, or 16.4 cents per unit.
The increased Funds From Operations allowed AOF to pay distributions of $21.1 million or 15 cents per unit over the period, which was 0.2 cents per unit more than the PDS forecast.
AOF Fund Manager Grant Nichols told the AGM that the portfolio was underpinned by 93.5 percent occupancy with no single significant lease expiry until 2022. More than 60 percent of AOF’s portfolio is currently leased to investment grade tenants such as Telstra, Boeing, Government and GE.
“AOF is well positioned for the future, with strong portfolio fundamentals and a favourable commercial property outlook”, he said. “We’ll continue to seek out opportunities that deliver sustainable and growing income returns for investors through a portfolio diversified by geography, tenants and lease expiry.”
Barring unforeseen changes to operating conditions, AOF’s FFO guidance for the 2018 financial year is 17.1-17.3 cents per unit, and distribution guidance of 15.6 cents per unit for the same period.
Portfolio Update at 30 June 20172
Portfolio Value $547 million
No. of properties 9
WALE 4.8 years
Occupancy 94.2 percent
More information about AOF’s full-year results to 30 June 2017 is available at http://www.asx.com.au/asx/share-price-research/company/AOF.
1 Total return for the period from 1 July 2016 to 30 June 2017 is calculated as the movement in AOF’s net asset value plus distributions for the period (($2.23+$0.15) / $1.95) – 1 = 22.1%.
2 Pro Forma position as at 30 June 2017 after the acquisition of 150 Charlotte Street, Brisbane