AUSTRALIAN UNITY OFFICE FUND (AOF)
Share Price Analysis and Chart

15/07/2024

2

Downgrade to Accumulate from Buy

$1.37

9.60%

Ord Minnett notes Australian Unity Office Fund announced a contract to sell 2-10 Valentine Ave, Parramatta for $80.5m, which is circa -15% below the December 2023 valuation and -6% below the draft June 2024 valuation.

The broker considers this to be a reasonable result as Parramatta has a 24% vacancy rate.

Following the settlement of this sale and the earlier sale of 96 York Street, Beenleigh, Ord Minnett lowers the target price to $1.37 from $1.45.

Australian Unity Office Fund retains two assets valued at around $97m as of December 2023, down from eight assets two years ago and the analyst expects it may eventually wind up the fund, subject to approval. 

The rating is downgraded to Accumulate from Buy.

FORECAST
Ord Minnett forecasts a full year FY24 dividend of 9.60 cents.
Ord Minnett forecasts a full year FY25 dividend of 2.60 cents.

23/04/2024

1

Buy

$1.55

24.00%

In Australian Unity Office Fund's fifth divestment since June 2022, notes Moelis, 150 Charlotte St has been sold for $64.5m, a 4% premium to December's book value.

Following settlement, the analyst expects a net cash position of around $60m by June 2025.

This sale suggests to the broker the REIT no longer requires a debt facility, thereby allowing management to close the hedge book, which is currently in the money with a net present value of circa $2.1m.

The broker's Buy rating is maintained and the target price increases to $1.55 from $1.47. It's felt the share price is attractive given potential for further near-term divestments at around book value.

FORECAST
Moelis forecasts a full year FY24 dividend of 5.80 cents and EPS of 7.50 cents.
Moelis forecasts a full year FY25 dividend of 2.90 cents and EPS of 3.50 cents.