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2-10Valentine Avenue, Parramatta. Source: Australian Unity Office Fund
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  • At the high end of its forecast range, the Australian Unity Office Fund (AOF) has received $30.6 in funds from operations, or 18.7 cents per unit (cpu)
  • AOF’s portfolio value fell by $30.8 million to $638.85 million, reflecting the sale of 241 Adelaide St, Brisbane, for $31.5 million offset by valuation uplift
  • The average lease expiry across the portfolio is 2.4 years, with a net lettable area of 98,067sqm and a 5.8 per cent weighted average capitalisation rate
  • AOF posted a $23.3 million profit for the year, up $10 million from FY20, but the net tangible asset per unit fell 0.1 cents to $2.71
  • Shares in AOF are down 1.98 per cent to $2.48 at 2:41 pm AEST

Australian Unity Office Fund (AOF) has received $30.6 in funds from operations, or 18.7 cents per unit (cpu), at the top end of its guidance range despite ongoing COVID-19 induced uncertainty.

The group’s portfolio value fell by $30.8 million to $638.85 million, reflecting the sale of 241 Adelaide Street, Brisbane, for $31.5 million, which was offset by a valuation uplift.

As of June 30, 2021, all properties had been independently revalued, with values growing $5.95 million owing to increases in the two Macquarie Park assets and 2-10 Valentine Avenue, Parramatta.

In FY21, 30 leasing transactions totalling 16,449sqm occurred prior to the sale of 241 Adelaide Street, Brisbane, and this total constituted roughly 15.3 per cent of the portfolio area.

The average lease expiry across the portfolio is 2.4 years, with a net lettable area of 98,067sqm and a 5.8 per cent weighted average capitalisation rate.

AOF fund manager Nikki Panagopoulos said the company’s portfolio had remained resilient in the current challenging environment.

“With occupancy at 95.7%, following strong leasing outcomes, and our approach to active management with the disposal of 241 Adelaide Street and the recent acquisition of 96 York Street Beenleigh, we believe AOF is well-positioned for FY22,” she said.

“As businesses reassess their cost bases and employees seek to work closer to home, reducing travel times on public transport, we expect the markets that AOF is invested in will outperform given their affordability when compared to the larger CBDs of Sydney and Melbourne.”

AOF recently undertook a strategic assessment of its business, when it was decided to focus on owning office properties in metropolitan and CBD markets, while a potential merger with Australian Unity Diversified Property Fund is still being investigated.

The company posted a $23.3 million profit for the year, up $10 million from FY20, but the net tangible asset per unit fell 0.1 cents to $2.71.

Gearing fell to 28.4 per cent throughout the financial year, considerably below the planned range of below 40 per cent with AOF drawing $190.8 million against a total loan facility of $250.0 million during the fiscal period.

AOF has given out $558,000 in rent exemptions thus far, which is less than one per cent of its rental income, while overall rental income dropped by roughly $1 million.

Ms Panagopoulos said the company was exploring the opening of divestment of its 32 Phillip Street, Parramatta, asset.

Subject to no substantial change in market circumstances and no unanticipated occurrences, AOF forecasts FY22 FFO of 18.0 – 18.5cpu and distribution guideline of 15.2cpu.

Shares in AOF were down 1.98 per cent to $2.48 at 2:41 pm AEST.

AOF by the numbers
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