Australian Unity Investments (AUI) has opened the $67 million discounted rights issue for its Retail Property Fund to a public offer following the successful raising of almost $30 million from existing investors.
As previously announced, the capital raised will be primarily used to fund and purchase an expansion to the Waurn Ponds Shopping Centre in Geelong, Victoria, the flagship property in the fund.
The initial offer, to existing investors only, opened in November 2010 and provided a limited priority rights offer to purchase one additional security for every two securities already held in the Fund at a ten percent discount*. The public offer, which is now open, allows anyone to purchase units in the fund at a ten percent discount to its daily security price on a first come, first served basis.
Mr Mark Pratt, AUI’s general manager – property, mortgages and capital markets, said that the original offer was very successful, raising almost half the required funds.
“Over the last few years, a number of organisations have struggled to raise capital through discounted rights issues but the response to our capital raising has been very positive. We are very pleased with the support that our investors have shown for the Fund and the expansion plans for the Waurn Ponds Shopping Centre.
“We believe this success shows a renewed appetite and optimism for direct property investment. In particular, it shows retail investor support for a high quality unlisted property fund such as the Retail Property Fund.
“We anticipate the public offer will also receive a high level of interest from new investors,” Mr Pratt said.
He added that the fund continues to provide investors with access to good quality assets and a regular income stream.
“In addition, it is one of the few unlisted property funds to offer a structured quarterly liquidity facility that allows investors to manage their liquidity requirements,” Mr Pratt said.
The public offer started on 16 December 2010 and will close on 31 May 2011, although it will close earlier if the required funds are raised before that date.
The expansion to the Waurn Ponds Shopping Centre is being built on land adjacent to the existing shopping centre. The land was purchased in 2006 as part of a long term strategy to improve the value of the centre.
The capital raised will allow the Fund to purchase the entire development upon completion of the expansion, which is expected to be in mid 2012. While the development is in progress, the funds will be used to reduce current gearing levels and effectively reduce the Fund’s borrowing costs.
The expansion will increase the size of the existing shopping centre, adding over 50 new tenancies to create a 35,000m2 centre. 80 percent of the new development is already pre-committed and the present centre currently has more than 97 percent occupancy.
The Fund has a ‘Recommended (Upper End)’ rating by Lonsec^ which covers the rights issue, Wholesale units and Class A units. It consists of seven retail properties in Victoria, NSW, Queensland and WA, and is valued at more than $389 million (as at 31 December 2010).
Australian Unity Investments is the funds management arm of financial services, health and retirement living services provider Australian Unity. It has more than $12.4 billion in funds under management (as at 31 December 2010). Its investment approach is to use its established in-house expertise in property and mortgages while also forming joint ventures and strategic alliances with other organisations with specialist expertise.
For more information please contact:
Mark Pratt – 03 8682 4448
* The ten percent discount applies to the security price as at 4 October 2010 which was $0.7909
^The Lonsec Limited (“Lonsec”) ABN 56 061 751 102 rating (assigned October 2010) presented in this document is limited to “General Advice” and based solely on consideration of the investment merits of the financial product(s). It is not a recommendation to purchase, sell or hold the relevant product(s), and you should seek independent financial advice before investing in this product(s). The rating is subject to change without notice and Lonsec assumes no obligation to update this document following publication. Lonsec receives a fee from the fund manager for rating the product(s) using comprehensive and objective criteria.