Australian Unity Investments (AUI) has announced its intention to combine three of its existing property trusts with two of its property syndicates, to form a single open-ended unlisted retail property fund.
The move is dependant on investor approval and will be voted upon at the end of November.
"Syndicates are generally single asset vehicles that locked investors into a fixed term, usually six years. Investors in today's world, they want liquidity, and to achieve these ends syndicates are being converted into open-ended property trusts," AUI head of property Martin Hession said.
"Having open-ended trusts with many retail properties... not only provides diversification and liquidity, it also puts you in a better spot to negotiate better lending arrangements, that will enable you to do more acquisitions... and be a more active portfolio manager," he said.
The five investment vehicles being brought together are: AUI's Retail Property Trust, Regional Retail Property Investment, East West Retail Property Syndicate, Retail Property Trust - Sunshine Homemaker Centre, and Property Syndicate - Wyong.
The conversion scheme will see existing investors exchange their units in the current investment offerings for units in the newly-created fund, so no significant tax event will be triggered, and no disruption to distributions will occur.
An initial withdrawal option will also be offered, subject to a cap of $20 million.
Should investors agree to the proposal, a $400 million unlisted retail property fund will result, incorporating seven underlying assets spanning NSW, Victoria, Queensland, and WA.
