Australian Unity Investment Real Estate Limited, as the responsible entity
for the Australian Unity Office Fund (ASX:AOF), today announced it has
entered into an unconditional agreement to acquire 150 Charlotte Street,
Brisbane for $105.75 million.
The building is in the heart of the Brisbane CBD adjacent to the ʹGolden
Triangleʹ and sits in close proximity to major bus, ferry and train networks
and the Queen Street Mall shopping precinct. It is 100 percent occupied with
a 5.7 year weighted average lease expiry, and over 75 percent of the rental
income is derived from well-known tenants Boeing Defence Australia and
the Commonwealth Government.
Grant Nichols, Fund Manager AOF said the purchase was consistent with
AOFʹs acquisition strategy and will improve the portfolio’s position,
including increasing its weighted average lease expiry, occupancy and lease
“The acquisition capitalises on an opportunity in the improving Brisbane
CBD office market and will neatly complement AOF’s existing portfolio”, he
“In Brisbane we have now seen 10 consecutive quarters of positive net
absorption to June 2017. This, coupled with the variance in capitalisation rate
spreads between Brisbane and Sydney, makes the acquisition a compelling
opportunity for investors in AOF as it nears its 18 month listing milestone”,
said Mr Nichols.
“150 Charlotte Street further underpins AOF’s ability to provide sustainable
income returns to investors” he said.
In conjunction with the acquisition, AOF is conducting an equity raising (via
a fully underwritten accelerated non‐renounceable entitlement offer) to raise
approximately $50 million at a fixed price of $2.23 per unit.
Proceeds from the equity raising will be used to partially fund the
acquisition with the balance funded via an extension to AOF’s debt facilities
with a new $70 million, five year tranche.
Subject to no material change in market conditions, AOF’s FY18 funds from
operations guidance of 17.1 – 17.3 cpu and FY18 distribution guidance of 15.6
cpu has not changed.
The retail entitlement information booklet is expected to be made available
to investors on Monday, 16 October 2017 and the offer will close at 5:00pm
on Monday, 30 October 2017.