Uncertainties Remain as Australian Unity Office Fund Seeks Approval for Brisbane Asset Sale

Conditional Sale Agreement for Brisbane Property

Australian Unity Investment Real Estate Limited (AUIREL), the responsible entity for Australian Unity Office Fund (ASX:AOF), has entered into a conditional contract to sell its Brisbane office asset at 150 Charlotte Street for $40 million. The purchaser is a fund managed by the Dexus Group. This follows previous attempts to sell the property, including a terminated contract in 2025 due to purchaser default, which saw AOF retain a $4.8 million deposit and plan to re-market the asset.

The current sale contract is conditional on receiving approval from the Foreign Investment Review Board (FIRB) and on securing renewed approval from AOF unitholders. The sale price reflects the gross amount and excludes any settlement adjustments or transaction costs.

Refreshing Unitholder Approvals Amid Delisting Plans

In December 2024, AOF unitholders approved the sale of the fund’s main undertaking and the subsequent delisting from the ASX. However, after consultation with the ASX, AUIREL considers it appropriate to refresh these approvals before proceeding further with the sale of Charlotte Street or the fund’s delisting and winding up. This refreshed approval process is intended to ensure unitholders have an up-to-date mandate on the fund’s key corporate actions.

AUIREL expects to provide unitholders with a Notice of Meeting and an Explanatory Memorandum in April 2026, with an extraordinary general meeting scheduled for May 2026 to vote on the proposal. Settlement of the property sale is also expected to occur in May, subject to the necessary approvals.

Expected Returns and Ongoing Uncertainties

If the proposal is implemented, AUIREL anticipates returning aggregate proceeds to unitholders of between $0.37 and $0.38 per AOF unit, assuming settlement at the agreed $40 million price. However, the final amount may vary due to settlement risks and uncertain costs associated with winding up the fund. Unitholders must be registered on the relevant record dates and maintain their holdings through the winding up to be eligible for the proceeds.

The directors of AUIREL have indicated their intention to recommend that unitholders vote in favour of the proposal, provided no superior offer emerges. This stance reflects a continuation of the fund’s strategy to exit its office property investments and wind up operations.

Background on Previous Sale Attempts

This development follows a series of challenges in selling 150 Charlotte Street. Notably, in September 2025, AOF terminated a sale contract after the purchaser failed to complete settlement by the deadline, retaining a $4.8 million deposit and opting to re-market the property. Prior to that, a revised $54.5 million offer was rejected by the fund’s board as not in unitholders’ best interests. These events contributed to a significant statutory loss for the fund in FY25 and delayed the fund’s winding up process.

For further details on the previous sale termination and the fund’s financial position, see the coverage on the terminated 2025 sale contract and the rejected $54.5 million offer.