Aliro makes takeover play for Australian Unity Office Fund

The private managers grab for the trust which owns a $635m portfolio could spark up the property sector.

Aliro Group executive chairman David Southon is back making takeover plays for listed companies.

The beaten down real estate investment trust market has received a boost with the private Aliro Group making a takeover play for the Australian Unity Office Fund which owns a portfolio of $635m suburban complexes.

The move brings into focus the opportunities thrown up by the deep falls in property stocks as investors worry about rising bond yields hitting values.

The move also heralds the arrival of the Aliro Group, headed by former Charter Hall joint managing director David Southon, as a potential force in influencing the listed market after its successful plays in logistics and build to rent property.

The unlisted Aliro Group Office Value Fund has proposed to acquire all the issued units in AOF for $2.45 cash per unit by way of a trust scheme and, significantly, it has the backing of Melbourne’s Hume Partners.

Hume, which is controlled by the Scanlon family, intends to vote its 19.97 per cent stake in favour of the proposal, in the absence of a superior proposal.

The private group had previously scuttled plans to create an Australian Unity-run diversified property vehicle with a $1.2bn portfolio via a merger with an unlisted fund, as well as earlier takeover bids that were at higher prices.

An independent board committee will be set up to consider the proposal with the Highbury Partnership as financial adviser.

The listed vehicle in March also tapped Colliers and Knight Frank to sell the assets in its $635m portfolio as it seeks to realise the value of its holdings.

It owns buildings in Sydney, Melbourne, Adelaide, Brisbane and Canberra and the takeover offer is well above the trust‘s closing price on Friday of $2.19.

The UBS trading desk said that the “for sale” shingle had been hanging outside the trust for some time and in February it said it was “considering a portfolio sale via a corporate transaction”.

In March it said it had received inquiries from a number of parties and “engagement with various parties … is ongoing”.

AOF was hit by the departure of a key tenant in Paramatta this month and also lost another from a Brisbane tower. The desk said the trust’s mark-to-market net tangible assets were likely closer to $2.50 than earlier figures.