Investors will be able to vote via proxy or by attending a general meeting of investors on 11 December 2013 in Melbourne.
OPF is an unlisted, Australian fund that is more diversified than AUI.
It owns eight office buildings in some of Australia’s major centres, with an estimated value of around $366 million, according to AUI.
As the FCT is a fixed term trust due to terminate in 2015, the proposal will enable AUI to maximise the value of FCT’s remaining properties in North Ryde NSW and Adelaide SA.
The proposal would allow FCT to effectively transfer its interests in both properties to OPF at an agreed valuation without the risks of a sales process and the cost of selling.
Australian Unity real estate investment, general manager, Mark Pratt, said the merger would offer investors with a cost and tax effective option to continue their investment in commercial property.
“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,” said Mr Pratt.
“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,” he added.
Mr Pratt said FCT investors would pay lower management fees for the OPF and that the dollar value of their investment would remain the same after being transferred to OPF on the implementation date.
He also explained that if approved, the merger would provide investors in FCT the opportunity to realise all or part of the investment through an initial $15 million capped withdrawal offer equating to around 25 per cent of FCT’s net asset value.
Investors will also have the opportunity to defer any capital gains tax on their investment by choosing scrip or 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
This merger follows the successful merge of the Australian Unity Industrial Trust with OPF earlier this year.
“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,” Mr Pratt concluded.
