APN seeking to recapitalise its Regional Property Fund

The Fund is an open-ended property fund listed on the National Stock Exchange of Australia (NSX code: APR). The Manager is seeking to create a level of liquidity to allow existing and new investors to acquire units in the Fund to assist in the funding of a Withdrawal Offer for existing investors wishing to exit the Fund.

The Fund currently owns two adjoining A-grade office assets at 26 and 28 Honeysuckle Drive, Newcastle NSW. The properties have an occupancy of 96.3% and a WALE of 3.2 years. The key tenant, Government Property NSW accounts for 32% of income with an upcoming lease expiry in November 2020.

The key features of the Fund include:

  • New investors and existing investors may apply for units at an Offer Price of $1.4346 per unit (the current NTA), with no dilution for acquisition costs for the current properties.
  • Withdrawals will be at a 1.2% - 2.1% discount to the NTA to reflect transaction costs.
  • The Manager is forecasting an FY19 distribution yield of 7.0% p.a. (annualised) increasing to 7.1% p.a. in FY20.
  • Following a successful completion of the Offer, the Manager intends to delist the Fund from the NSX. The Fund will then become an unlisted property fund with a further withdrawal facility expected in 5-years, in 2024.
Core Property has rated the Fund as APPROVED.