LDR Assets Holds 33% Stake, Offers 1.9% Premium in ECF Takeover Bid

Takeover Offer Update

LDR Assets Pty Ltd, acting through the Lederer Family Office, has issued a first supplementary bidder’s statement updating its off-market takeover offer for the Elanor Commercial Property Fund (ECF). The offer stands at $0.70 cash per stapled security, representing a modest 1.9% premium to ECF’s net tangible asset (NTA) value as of 30 June 2025. As of early October, LDR and its associates hold a significant 33.14% stake in ECF, underscoring their commitment to the bid.

The offer is set to close at 7 – 00pm Sydney time on Monday, 13 October 2025, with the bidder recommending that securityholders accept promptly to avoid potential price declines once the offer lapses. Since the onset of the COVID-19 pandemic, ECF and similar Australian Real Estate Investment Trusts (A-REITs) with commercial office exposure have traded at discounts to their NTA, reflecting ongoing market uncertainties.

Critique of ECF Management and Market Outlook

The Lederer Family Office has voiced serious concerns about the management of ECF under Elanor Investors Group, which currently serves as the responsible entity, investment manager, and property manager. Since the Lederer Family Office’s initial investment in FY2022, Elanor has received approximately $21 million in related party fees from ECF’s assets, a figure that has prompted a formal complaint and a request for a forensic accountant to investigate the fee disclosures and quantum.

Moreover, LDR challenges the optimistic commercial property market forecasts presented by ECF’s independent board committee (IBC), suggesting these projections may mislead investors by overstating the potential recovery. The bidder highlights risks such as prolonged recovery periods, hybrid work arrangements, and soft demand in fringe locations that could suppress rental growth and distributions.

Concerns Over Elanor’s Financial Stability

Adding to investor caution, the bidder points to significant going concern risks faced by Elanor Investors Group, which could materially impact ECF’s ongoing management and performance. Recent developments, including the unwinding of Elanor’s partnership with Challenger and potential management changes in related funds, have introduced uncertainty. While an independent expert report downplays these risks as not directly affecting ECF’s solvency, LDR disputes this view, emphasizing the interconnectedness of Elanor’s financial health and ECF’s future prospects.

The bidder also notes that Elanor’s proposed recapitalisation, involving Rockworth and Firmus, remains insufficiently detailed, leaving questions about its impact on both Elanor and ECF unresolved.

Performance Under Elanor’s Management

Under Elanor’s stewardship, ECF’s financial metrics have shown a downward trend – funds from operations per security have declined from 11 cents in FY2022 to 9.4 cents in FY2025, distributions per security have fallen from 9.4 cents to 7.5 cents over the same period, and net tangible assets per security have dropped from $1.20 to $0.69. Gearing levels have increased, reflecting higher leverage. These figures underpin LDR’s argument that the current offer price is a fair reflection of ECF’s value in the prevailing market.

Next Steps for Investors

With no competing bids on the horizon and the offer deadline imminent, the Lederer Family Office urges ECF securityholders to consider the risks of holding on amid ongoing management and market uncertainties. The call for a forensic accounting investigation into fees and the unresolved implications of Elanor’s recapitalisation add layers of complexity to the investment case. Investors are advised to seek professional advice and weigh the offer carefully before the closing date.