APN Fund Recapitalisation
APN Property Group announced that it has recapitalised the APN Regional Property Fund providing full liquidity to all investors who wished to redeem their investment, while also allowing existing and new investors the ability to access the benefits of the Fund for a further term of five years.
The APN Regional Property Fund has owned two A-Grade office buildings in the central business district of Newcastle, NSW since its establishment in 2004. Now independently valued at $51.75m (representing a capitalisation rate of 7.25% or $5,493 sqm of NLA), the Fund is forecast to deliver a starting distribution yield of 7.0% for the remainder of FY19, rising to 7.10% for FY20.
The Fund has delivered an annualised total return of 18.8% over the three years to 31 December 2018 to the outgoing investors.
APN sought to raise $36M for the fund with a forecast distribution yield of 7%.
As part of delivering the recapitalisation and extension of the Fund, APN has used part of its cash holdings to sub-underwrite the transaction including to meet demand from investors that have either committed or are completing their evaluation of the investment opportunity but were not able to meet the strict offer timetable (which was not able to be extended because of applicable legal requirements).
APN’s objective is to actively recycle this capital as it has done previously including with the APN Nowra Property Fund which was successfully launched last December.