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AUI proposes property funds merger
Australian Unity Investments (AUI) plans to merge its Second Industrial Trust (SIT) with its Office Property Fund, subject to investor approval.
Investors in SIT will be eligible to vote on the proposal via proxy or by attending a general meeting of investors on 24 May in Melbourne.
According to AUI, the purpose of the merger is to create a $360 million property fund currently holding commercial properties in Sydney, Melbourne, Adelaide, Brisbane, Canberra and Perth.
With SIT's fixed term trust due to terminate in 2014, the trust will own a single property in New South Wales currently valued at just over $29 million at the time of the merger approval.
AUI head of property, mortgage and capital markets Mark Pratt said the investment manager had spent several months researching the options available to SIT, with the merger proposal found to be the best option for investors.
He said AUI would allow investors to maintain their investment in the Australian property market beyond SIT's schedule termination.
"If the proposal is approved, investors will be offered an initial $5.7 million capped withdrawal offer equating to approximately 25 per cent of SIT's forecast net asset value at the withdrawal offer date," AUI stated.
AUI has combined investment vehicles in the past. Its Retail Property Fund formed in 2009 with the merger of six existing property trusts.
"Such an approach can give investors exposure to a number of quality, large-scale direct properties that their previous investments couldn't provide," Pratt said.
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