Australian Unity, Newmark Strike Deal on $260m Fund

A quarter-billion-dollar property fund is changing hands as Australian Unity shifts focus.

The mutual company has agreed to sell Australian Unity Investments Limited, the responsible entity of the Australian Unity Property Income Fund, to specialist property funds management group Newmark Capital.

The transaction involves the transfer of management rights for the fund, which holds about $260 million in commercial property assets. Completion is scheduled for the end of this financial year.

The Australian Unity Property Income Fund has operated for more than 25 years, with a diversified portfolio spanning direct property, unlisted property trusts and Australian REITs.

The fund’s portfolio includes $79.7m of direct property assets, which is 28.9 per cent of the fund, and comprises offices and industrial buildings of less than $30 million in value, across Victoria, Queensland, New South Wales and South Australia.

Unlisted property investments account for 19.7 per cent of holdings at $54.2 million, spanning healthcare, retail and childcare sectors. The fund also maintains $103.9 million in Australian Real Estate Investment Trust listed property investments and $37.6 million in cash.

Australian Unity executive general manager—finance and commercial Jenny Saliba said the transfer of the fund was “consistent with Australian Unity’s strategy to focus its funds management business in areas where it can increase scale and impact”.

She said this included its Platypus Asset Management business, Healthcare Property Trust and other social infrastructure investment products.

The transaction ensures continuity for investors, with no changes planned to the fund’s investment strategy, daily liquidity mechanism, distribution frequency or unit holdings, according to Australian Unity.

Portfolio manager Damian Diamantopoulos and assistant portfolio manager Andrew McLeod will join Newmark to continue managing the fund.

The fund’s direct property holdings include five current assets valued at more than $77 million.

▲ The fund’s direct property holdings include this industrial asset at Braeside.

The largest is an industrial property at Governor Road, Braeside, valued at $28 million. It also includes office properties in Adelaide, Port Adelaide, Brisbane and Newcastle ranging in values from $7 million to $16.2 million.

The fund recently sold three properties totalling $42.8 million that comprised industrial assets in Victoria and an office building in Queensland.

This latest transaction continues Australian Unity’s retreat from commercial real estate.

The group previously hired agents to offload assets in its $371.5 million listed Australian Unity Office Fund and shelved plans to merge its office and diversified property funds.

The organisation acquired myHomecare Group for $285 million in February, signalling its pivot towards healthcare services.

Newmark manages premium retail properties including the David Jones building at Bourke Street, Melbourne, Gateway Plaza Shopping Centre at Warrnambool and Brandon Park shopping centre at Mulgrave.

The BWP Trust acquired Newmark Property REIT for about $250 million this year, gaining control of $600 million worth of assets.