Sydney-based Quattro Income REIT has resumed plans to list a New Zealand property portfolio, albeit with fewer properties and has shaved nearly a third off the capital it wants to raise in a public offer on the ASX.
The company will seek to raise $A220 million ($NZ242.5m) in an initial public offer, from a previously planned $A305m, selling units at $A1 a piece, it said in a statement.
Quattro’s portfolio has also been reduced to $A320m from $A431m, after it halved the number of properties to focus only on commercial office buildings.
Last week the company shelved its offer plans, saying “despite the extensive local and international marketing of the IPO, which generated very positive feedback, the current market volatility has prompted us to put the transaction on hold for the time being”.
Heightened uncertainty on the ASX and in global markets had seen the S&P/ASX 200 Index decline some 4.7 per cent over the past three months.
The portfolio will be made up of two commercial properties in Wellington, Spark Central, bought from Ian Cassel’s The Wellington Company, and Precinct Properties New Zealand’s 125 The Terrace building and the SAP Tower in Auckland, also bought from Precinct.
The fund forecasts its distribution yield at eight per cent in 2015 and 8.82 per cent in 2016, and boasts operating earnings growth of 8.5 per cent in 2015 and 8.8 per cent in 2016.
Quattro is hoping to lure investors with an average 99 per cent occupancy rate, with a weighted average lease to expiry of 7.3 years and an average yield of 7.9 per cent. Its initial gearing will be 32 per cent, it said.
The company expects to lodge a product disclosure statement with the Australian Securities and Investments Commission on November 6.