Sale Default Puts Australian Unity Office Fund’s Wind-Up Plans in Question
Australian Unity Office Fund reported a statutory loss of $3.2 million for the half-year ended 31 December 2025, improving significantly from the prior period. The Fund is actively marketing its sole remaining property as it prepares to wind up operations following unitholder approval.
- Statutory loss narrowed to $3.2 million from $26.8 million a year earlier
- Sole remaining asset, 150 Charlotte Street Brisbane, under renewed sale discussions
- Previous sale contract terminated after purchaser defaulted, $5 million deposit retained
- No distributions declared during the half-year
- Fund progressing with disposal and planned ASX delisting and wind-up
Half-Year Financial Performance
Australian Unity Office Fund (AOF) has reported a statutory loss of $3.2 million for the six months ending 31 December 2025, a marked improvement compared to the $26.8 million loss recorded in the same period last year. This reduction in losses was primarily driven by a smaller net fair value decrement of $7.8 million on its investment property portfolio, alongside other income of nearly $5 million.
Asset Disposition and Contract Default
The Fund currently holds a single investment property at 150 Charlotte Street, Brisbane, Queensland. This asset was previously under contract for sale at a net price of $63.5 million following a deferred settlement agreement. However, the purchaser defaulted on payment obligations, leading to contract termination in September 2025. Australian Unity Office Fund retained a $5 million deposit and associated securities as other income, reflecting a partial recovery despite the failed sale.
Renewed Sale Efforts and Uncertainty
Following the contract termination, the Fund has relaunched marketing efforts for the Brisbane property, including an Expression of Interest campaign. Discussions are ongoing with a preferred party for a potential sale at $40 million. However, there is no certainty that these negotiations will culminate in a transaction or on what terms. The Fund has prudently refrained from providing distribution guidance in the absence of a binding sale agreement.
Strategic Wind-Up and Delisting Plans
In December 2024, unitholders approved the disposal of the Fund’s main undertaking and the subsequent delisting from the ASX. The Responsible Entity is actively executing this strategy, which involves selling remaining assets, settling liabilities, and returning net proceeds to unitholders. Upon completion of these steps, the Fund intends to delist and wind up the Scheme. As at 31 December 2025, the Fund reported net tangible assets per unit of $0.42, down from $1.14 a year earlier, reflecting the ongoing asset sales and market conditions.
Financial Position and Outlook
The Fund held no borrowings at the half-year end, maintaining a clean balance sheet as it navigates the disposal process. While the current focus remains on finalising the sale of 150 Charlotte Street, the Fund’s future hinges on securing a transaction and obtaining unitholder approval for the wind-up. The directors have confirmed there are no material changes or contingencies that would affect the Fund’s financial position beyond those disclosed.
Bottom Line?
With the Fund’s sole remaining asset back on the market and sale discussions underway, investors await clarity on the timing and terms that will shape the final chapter of Australian Unity Office Fund.
Questions in the middle?
- Will the Fund secure a sale for 150 Charlotte Street at or near the $40 million asking price?
- How will the timing of the property sale impact the Fund’s delisting and wind-up schedule?
- What are the implications for unitholder returns given the absence of distributions this half-year?
