Australian Unity will seek to raise up to $155 million if its plan to list its Australian Unity Office Property Fund on the ASX is successful.
According to a statement, Australian Unity is in the midst of finalising a listing proposal.
The unlisted property fund owns a portfolio of eight office assets in NSW, Victoria, the Australian Capital Territory, South Australia and Queensland, with assets valued at $391 million.
Mark Pratt, general manager of Australian Unity Real Estate Investment, expects there will be strong interest from investors for the first A-REIT to list on the ASX this calendar year.
“We believe an ASX listing is in the best interests of existing investors as it will provide access to additional equity for the sustainable growth of the fund and liquidity to those investors seeking to withdraw,” Mr Pratt said.
“The Australian Unity brand is already well known and respected for its expertise and track record in unlisted property management and we believe this will transfer well to the listed environment.”
Australian Unity’s joint lead managers for the IPO are Credit Suisse (Australia) Limited, UBS AG Australia Branch and National Australia Bank Limited.
The new listed fund will be named the Australian Unity Office Fund and Mr Pratt said institutional marketing will commence shortly.
As a result of the IPO, the fund will be able to reduce its gearing to approximately 30 per cent upon listing, terminate interest rate swaps, facilitate a significant withdrawal offer to existing investors and pay for transaction costs.
Australian Unity corporate entities and funds managed by Australian Unity subsidiaries are expected to have an investment in the listed fund of up to 15 per cent at allotment.
As at 30 April 2016, the fund’s occupancy was 96.5 per cent (by net lettable area) and its weighted average lease expiry 4.7 years (by gross property income).
An Explanatory Memorandum and Notice of Meeting is expected to be sent to investors in the fund after the institutional marketing process has concluded, and an underwriting agreement signed in late May 2016.