Australian Unity Office Fund (ASX:AOF) share price up after $31.5 million real estate deal

The Australian Unity Office Fund (ASX: AOF) share price on the rise after it announced the $31.5 million dollar sale.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Australian Unity Office Fund (ASX: AOF) share price is trading higher in afternoon trade. 

Late yesterday, the real estate investment trust (REIT) announced the $31.5 million sale of one of its Brisbane properties. The fund also announced it would be suspending its dividend reinvestment plan (DRP) for this quarter.

Shares in Australian Unity are trading at $2.27, up 2.25%. For comparison, the S&P/ASX All Ordinaries Index(ASX: XJO) is up 0.8%.

What did Australian Unity announce?

Australian Unity announced it had reached an agreement to sell 241 Adelaide Street, Brisbane. The $31.5 million sale price is equal to the asset's book value as of 31 December 2020.

Australian Unity is selling the building along with the lease to the Brisbane Club. 42 years are remaining on the lease.

Speaking on the deal, fund manager James Freeman commented:

[241 Adelaide Street] was identified as non-core to AOF and we are pleased to have entered into a conditional contract to dispose of this asset. The purchaser has also entered into arrangements with the Brisbane Club to acquire the freehold. AOF's sale is conditional upon completion of the acquisition of the freehold. We are targeting settlement prior to 30 June 2021.

In addition to the asset sale, Australian Unity also announced the suspension of its DRP for Q3 FY21.

According to the Commonwealth Bank of Australia (ASX: CBA), a DRP is an alternative method for dividend payments. Instead of the company reimbursing you its profits through cash, it will automatically invest the payment into new shares for the owner. These shares are sometimes issued at a discount. No fees are associated with the issuance of new shares.

Finally, Australian Unity confirmed it would meet its FY21 FFO guidance of 18.3 – 18.7 cents per share.

Australian Unity share price snapshot

Shares in the fund crashed at the height of the COVID-19 pandemic, reaching a low of $1.50. While they have recovered since then, the share price is still 16.23% down on this time last year.

Australian Unity has a market capitalisation of $361.6 million.

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Person pointing at an increasing blue graph which represents a rising share price.
Broker Notes

These ASX 200 shares could rise 33% to 37%

Analysts at Morgans think these shares could deliver big returns.

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a volatile, but negative day for ASX investors this Thursday.

Read more »

Woman with an amazed expression has her hands and arms out with a laptop in front of her.
Share Gainers

Guess which ASX 200 stock turned $5,000 into $34,264 in just three years!

Investors have been piling into this ASX 200 stock for years, sending the share price soaring.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why Beach Energy, Meeka Metals, Monash IVF, and Qantas shares are racing higher today

These shares are having a better day than most on Thursday. But why?

Read more »

Female miner in hard hat and safety vest on laptop with mining drill in background.
Broker Notes

Experts reveal 2 buys and 1 sell in the ASX 200 materials sector

And they're not all mining companies, either.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Betmakers, Cettire, Johns Lyng, and Vulcan shares are falling today

These shares are having a tough session on Thursday. But why?

Read more »

A smiling miner wearing a high vis vest and yellow hardhat does the thumbs up in front of an open pit copper mine.
Broker Notes

Why Macquarie expects this ASX All Ords copper stock to soar 48% in a year

Macquarie forecasts another big year of gains ahead for this ASX All Ords copper stock. But why?

Read more »

Middle age caucasian man smiling confident drinking coffee at home.
Broker Notes

How much upside does Macquarie expect for Steadfast Group shares?

The broker has given its verdict on this blue chip.

Read more »