The Executive Committee of PFA recently elected Steven Bennett, Head of Charter Hall Direct, as the new President of PFA’s National Executive Committee, taking over the role from Mark Pratt, Executive General Manager –  Property at Australian Unity.

The Association also elected Andrew Cannane, Executive Director at Evans Dixon as the Committee’s new Vice President.

Formed in 1998 PFA was established to provide the growing number of direct property investors and managers with an organisation to represent their interests, promote their industry and provide a forum for research and education.

Paul Healy, Chief Executive Officer, PFA noted: “We welcome our new President and Vice President to the Executive Commitee. The Executive Committee is the decision-making body of the Association and comprises of PFA members which represent the various areas of the Association’s constituency. Both Steven and Andrew are regarded as experienced direct property professionals in the commercial property space and we look forward to their insights and contribution in growing investor awareness around the direct property sector.

“I would like to thank our previous President, Mark Pratt, for his contribution towards growing the Association’s scope to represent the advisors, consultants and representatives of property investors and managers.”

Steven Bennett, Head of Charter Hall Direct, added: “I am honoured to be appointed in this new role. Having been a member of the Association since 2014, I believe the Association will continue to play an integral role in representing the interests of the direct property industry.

“Over the last two decades, this sector has grown dramatically and has become a core investment class for growing the wealth of Australian investors by providing strong risk adjusted returns and a stable source of regular income.

“Apart from the high levels of ongoing income, what makes direct property so compelling is its low correlation with other asset classes providing effective diversification benefits and lower relative volatility. This means direct property investments react in a different manner to varying economic conditions compared to other major investment classes such as shares and bonds.

“For this reason, we believe, investors will continue to hold direct property as an essential component in their portfolios,” said Mr Bennett.

The Annual PFA Conference for 2019 will be held in Hobart from 5-7 May. It will review the activity in global and local markets and examine whether current times are a crisis, challenge or catalyst for property investment.

Key Conference speakers include:

• David Harrison, Managing Director and Group CEO, Charter Hall
• Simon Garing, Acting Chief Executive Officer and Executive Director, Cromwell EREIT Management
• Justin Smirk, Director – Senior Economist, Westpac Institutional Bank
• Penny Ransom, Group Executive, Head of Investment Management, Investa Property Group
• Rob de Vos, Managing Director, Arena REIT

More information about the Conference.

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Mark Pratt

Australian Unity has issued a timetable for its plans to list the Australian Unity Office Property Fund on the Australian Securities Exchange (ASX), with the proposal to be voted on by existing unitholders on 17 June 2016.

This follows a successful institutional marketing campaign and strong investor feedback on the proposed initial public offer (IPO).

The fund is an unlisted property fund, established in 2005, which owns a portfolio of eight office assets in New South Wales, Victoria, Australian Capital Territory, South Australia and Queensland, with assets valued at $391 million, at 30 April 2016.

Mark Pratt, general manager of Australian Unity Real Estate Investment, said the market has responded positively to both the proposal and the prospect of Australian Unity’s commercial property capability in a listed environment.

“This is the first A-REIT expected to list on the ASX this calendar year and we have been pleased with the high level of interest from investors to date.

“The strong reception by both institutional and retail investors has confirmed our view that an ASX listing is in the best interests of existing unitholders,” Mr Pratt said.

Australian Unity proposes to list the fund on the ASX, raising up to $155 million of equity from new and existing unitholders via an underwritten IPO, and providing a capped $56.2 million withdrawal offer to existing unitholders.

“The listing 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 IPO will also enable the fund to reduce its gearing to approximately 30 per cent upon listing.”

The new listed fund will be named the Australian Unity Office Fund.

To progress the listing, Australian Unity has issued a Notice of Meeting to existing investors in the fund to seek their approval. The meeting will be held on Friday, 17 June 2016.

Existing investors will also shortly receive an offer to participate in the IPO.

“If investors pass all resolutions set out in the Notice of Meeting, the fund will trade on the ASX on a conditional and deferred settlement basis on or around 20 June 2016.

“As the IPO has now been underwritten by Credit Suisse (Australia) Limited, UBS AG Australia Branch and National Australia Bank Limited, we believe existing investors can vote with a high degree of certainty on the listing proposal,” Mr Pratt said.

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.

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Mark Pratt

Australian Unity Real Estate Investment (AUREI) has successfully acquired Owenlaw Trust Limited, the manager of the $60 million Owenlaw First Mortgage Income Fund and the $20 million Owenlaw Mortgage Trust.

The Owenlaw First Mortgage Income Fund is a ‘contributory fund’ where investors can invest in individual mortgages with different terms (up to a maximum of two years) and different interest rates payable. The fund will now be known as the Australian Unity Select Mortgage Income Fund.

The Owenlaw Mortgage Trust, now known as the Australian Unity Pooled Mortgage Fund is an investment scheme that invests in a portfolio of registered first mortgages and is currently closed to new investors.

Mark Pratt, general manager, Australian Unity Real Estate Investment, said the acquisition comes at a key point in the market cycle, and that now is an opportune time to expand and grow the mortgage investment business.

“The future of non-bank lending looks promising with the doors to competition starting to open presenting opportunities for mortgage funds like these.

“With interest rates predicted to remain low for some time to come, mortgage funds are very well placed to provide investors, particularly retirees, with solid and stable income returns that are well above the cash rate.

“AUREI has an extensive track record in mortgage investments and our mortgage portfolio is currently valued at more than $228 million.  We have an experienced and high quality mortgage team led by Roy Prasad, and have long believed that mortgage funds have a useful role to play in investor portfolios.

“The Owenlaw First Mortgage Income Fund and Owenlaw Mortgage Trust are quality mortgage funds which have provided investors with stable and regular income for almost 20 years.  We intend to continue managing the funds in line with their   current investment strategy.

David Owen, chairman of Owenlaw Trust, who is retiring after 40 years of managing the business, said Australian Unity is widely recognised as one of Australia’s leading mortgage investment managers.

“In addition to the newly acquired funds, AUREI is responsible for a quality mortgage portfolio and hasdemonstrated expertise and commitment to investors in its mortgage funds.

“After the sale, both director Luke Anderson and office manager Maria Andricopoulos will join AUREI to continue to look after the Funds’ investors and borrowers, helping to ensure a smooth transition,” Mr Owen said.

The Funds will continue to pay monthly distributions and investment statements will continue to be sent quarterly.

“AUREI recognises the value of this acquisition and will look to leverage its national footprint to provide new investment opportunities for investors and borrowers alike,” Mr Pratt said.

Roy Prasad, head of mortgages at AUREI said that Owenlaw has a strong track record providing development finance for small and medium sized commercial and residential developers.

“These businesses often find it difficult to source funding from the major institutions for a variety of reasons and we look forward to continuing to service this important part of the market.”

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Mark Pratt

Strong investor demand for alternative real estate investments such as social infrastructure has seen strong inflows into Australian Unity’s Healthcare Property Trust (HPT) over the last year.

Mark Pratt, head of real estate investment at Australian Unity, said HPT has received inflows of approximately $140 million over the last financial year.

“The on-going demand from investors for social infrastructure investments has been a trend for some time now and shows no sign of diminishing.

“The resulting inflows into HPT have given us significant capacity and the challenge for us now is to find the right assets to add to the fund.

“Social infrastructure assets including private and public hospitals and medical facilities have always been thinly-traded.

“We are continually looking for opportunities to expand and have circa $350 million in available capacity to acquire new properties that meet our acquisition criteria, or to expand existing ones to enhance the services they provide.”

Mr Pratt said that competition for assets from both onshore and offshore investors has intensified in recent years.

“We are always working with existing tenants to help them grow via brownfield developments.  A good example of this is our development of The Valley Private Hospital in the Victorian suburb of Mulgrave, which delivered many benefits to the area including additional jobs as well as enhanced medical care and support.

“There is untapped potential for existing private owners, including churches and charitable organisations, to release capital held in their properties to facilitate further development and growth.

“We believe there is a significant role for private capital to support and expand the social infrastructure services that are currently provided primarily by the public sector – a role that will inevitably change in coming years as the government seeks alternatives to support the provision of healthcare and medical services required by our ageing population.

“Use of private hospitals will continue to rise to take the pressure off the public system, which in turn will increase demand on existing private hospitals and medical centres.

“This will be to the benefit of investors who have enjoyed attractive stable returns since the HPT started 15 years ago despite recent market and economic volatility,” Mr Pratt said.

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AUI is seeking to merge its Australian Unity Fifth Commercial Trust and its Australian Unity Office Property Fund.

Australian Unity Investments (AUI) is seeking approval from investors in the Australian Unity Fifth Commercial Trust (FCT) to merge the trust with the larger, more diversified, Australian Unity Office Property Fund (OPF).

Investors in FCT will be eligible to vote on the Proposal via proxy or by attending a general meeting of investors on Wednesday 11 December 2013, in Melbourne.

OPF is an unlisted property fund, which owns eight quality office buildings in some of Australia’s major centres, with a forecast total asset value of approximately $366 million (30 June 2014).

FCT is a fixed term trust due to terminate in 2015. By making the Proposal now, AUI is seeking to maximise the value of FCT’s remaining properties at 5 Eden Park, North Ryde NSW and 30 Pirie Street, Adelaide SA (already 50% owned by OPF). The Proposal allows FCT to effectively transfer its interests in both properties to OPF at an agreed valuation; which removes the reliance on the risks of a sale process, and involves no selling costs.

Mark Pratt, General Manager Australian Unity real estate investment, said the merger would provide investors with a cost and tax effective option to continue their investment in commercial property.

“We believe the proposal is in the best interests of investors in FCT and will deliver a number of key benefits.

“OPF is forecast to provide higher distribution returns than those forecast for FCT, has greater diversification than FCT, and intends to continue providing regular capped withdrawal opportunities to investors.

“Investors will have the ability to continue their exposure to the property market via an investment in the OPF – a diversified fund open to new investment that has been operating for more than eight years.

“The Proposal ensures certainty of transaction values for the remaining properties in the Trust, no selling costs and the opportunity to consolidate the joint ownership of 30 Pirie Street, Adelaide SA, providing greater control over its asset management strategy.”

Mr Pratt said if the merger was approved, FCT investors would pay lower management fees, as the management fees for the OPF are lower.

“A number of investors in FCT have indicated to us they would like to maintain an investment in the Australian property market beyond FCT’s scheduled termination in May 2015.

“If investors vote in favour of the Proposal, their investment will transfer to the OPF with the dollar value of their investment remaining unchanged at the implementation date,” Mr Pratt said.

If the merger is approved, it provides investors in FCT the opportunity to realise all or part of the investment through an initial $15 million capped withdrawal offer equating to approximately 25 per cent of FCT’s net asset value. They may also have the opportunity to defer any capital gains tax (CGT) on their investment by opting for scrip for scrip rollover relief.

“It is also our recent practice, and future intention, to provide investors in the OPF with the flexibility to withdraw through half-yearly capped withdrawal offers,” Mr Pratt said

Mr Pratt said AUI is experienced in successfully bringing together investment vehicles. Earlier this year it merged the Australian Unity Second Industrial Trust with OPF following strong support from investors, and in 2009 it converted five retail property syndicates and trusts into a single fund, the Australian Unity Retail Property Fund.

“We believe a merger would broaden FCT investors’ diversification of properties by tenant and geography. As the OPF is open to new investment, it can also raise capital and acquire or dispose of assets in order to take advantage of market opportunities in line with Australian Unity’s active asset management,” he said.

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AUI wins the API Commonwealth Bank of Australia Property Trust Industry Award.

Australian Unity Healthcare Property Trust has been named the winner of the 2013 Australian Property Institute NSW Excellence in Property Awards in the Property Trust Industry category.

The Trust is an unlisted property trust that invests in healthcare related property assets with a primary focus on delivering regular income, plus the opportunity for long-term capital growth.

The API Commonwealth Bank of Australia Property Trust Industry Award is made to a listed or unlisted property trust or property syndicate that shows superior industry performance through such attributes as innovation, financial performance and public accountability.

This is the second award for Australian Unity Investments this month. It was also named the winner of the Professional Planner/Zenith Investment Partners Direct Property Fund Manager of the year award for 2013.

This Award is recognition of the Trust’s reputation for innovation and successful property development,” says Mark Pratt, AUI’s head of property, mortgages and capital markets.

“These respected and prestigious awards recognise outstanding achievement in the property profession and the built and natural environments. Being awarded winner in the Property Trust Industry category is a strong endorsement of our investment approach and our achievements on behalf of our investors.

“Over the past three years, the Trust has launched a series of innovative brownfield developments designed to boost investor returns and respond to increased tenant demands for more space and increased capacity.

“The Trust maintains a pipeline of development projects to grow and enhance the existing properties in its portfolio. In addition, given considerable investor support over the past year, the Trust has built significant capacity for further acquisitions.

“Fundamentally, we believe demand for private healthcare services will continue to grow. Already there is substantial evidence of expanding demand in the sector and the Trust stands ready to capitalise on this for the benefit of its investors.”

Over the past 13 years, the Trust has grown to become one of the largest and highest-rated unlisted property funds in Australia. Today, the Trust has a diversified tenant base and a quality direct portfolio of 24 healthcare properties across Australia, which together with its other assets, are valued $485.5 million (30 September 2013).

AUI has been managing property funds for 14 years, and is a leader in property management. It manages a range of diversified property funds, covering healthcare, retail, industrial, commercial and office property and has over $1.7 billion in property assets under management (as a 30 September 2013).

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AUI picks up the Direct Property Fund Manager of the Year award for 2013.

Australian Unity Investments (AUI) has been named winner of the Professional Planner/Zenith Investment Partners Direct Property Fund Manager of the Year award for 2013.

AUI manages a range of diversified property funds, covering healthcare, retail, industrial, commercial and office property and has over $1.7 billion in property assets under management (as at 30 September 2013).

The Professional Planner/Zenith Investment Partners Fund Awards recognise excellence in the application of a fund manager’s investment philosophy and process. Zenith selects award nominees and winners based on its robust and comprehensive manager assessment methodology, which focuses on nine aspects of how fund management businesses are organised and operate including organisational strength, investment philosophy and process, risk management and performance.

Direct Property was one of three new fund categories for the 2013 awards and reflects the growing importance of the sector and the increased interest among financial planners in using property in diversified portfolios.

“The awards are recognised as an assessment of excellence in the retail managed funds industry. Being awarded the inaugural Direct Property Fund Manager of the Year award is a strong endorsement of our investment approach and our achievements on behalf of our investors,” says Mark Pratt, AUI’s head of property, mortgage and capital markets.

“AUI has been managing property funds for 14 years, and believes the Australian property market is currently offering investors attractive yields and stable values.

“An investment in property funds can offer investors access to a range of properties diversified by property type, sector, tenant and geographic location. If investors are looking for a consistent income yield then investment in a well-managed property fund is well worth considering.”

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The HYMT will start returning all remaining capital to investors through regular payments and Mr David Bryant, CEO of AUI, said that with 48% of the trust already returned to investors through periodic redemption facilities, AUI expects the remaining 52% to be returned progressively between now and late 2014, as assets in the fund mature.

“We believe this decision is in the best interests of all investors in this particular trust in light of the investment environment since the global financial crisis.

“The government’s bank deposit guarantee, seen as necessary because of the GFC, had the unfortunate side-effect of triggering a rush of withdrawals from mortgage funds, forcing most to freeze redemptions.

“Following this, we have continued to see persistent demand for liquidity from investors in the HYMT and, given continued rate of redemptions we believe that the most responsible action is to formally terminate the trust and return the balance of the capital to investors,” said Mr Bryant.

AUI will make an initial payment to investors before Christmas of approximately 10 percent of investors’ capital.  A second payment, of around five percent, will be made in March next year, and AUI expects to continue making regular payments on a six-monthly basis from September 2012. It anticipates that the fund will be fully closed by the end of 2014.

Mr Mark Pratt, general manager of property, mortgages and capital markets at AUI, said that despite winding down HYMT, AUI continues to believe mortgage funds have a role to play for investors looking for consistent income and regular access to their capital.

“The Mortgage Income Trust remains an important part of the investment portfolio of its investors, and given feedback from investors and lower levels of redemptions, this fund will continue under its current arrangements,” Mr Pratt said.

The Australian Unity Wholesale Mortgage Income Trust has returned 5.25% for the year ending 30 November 2011.

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