The Australian Unity Office Fund (ASX: AOF) share price is trading higher in afternoon trade.
Late yesterday, the real estate investment trust (REIT) announced the $31.5 million sale of one of its Brisbane properties. The fund also announced it would be suspending its dividend reinvestment plan (DRP) for this quarter.
Shares in Australian Unity are trading at $2.27, up 2.25%. For comparison, the S&P/ASX All Ordinaries Index(ASX: XJO) is up 0.8%.
What did Australian Unity announce?
Australian Unity announced it had reached an agreement to sell 241 Adelaide Street, Brisbane. The $31.5 million sale price is equal to the asset's book value as of 31 December 2020.
Australian Unity is selling the building along with the lease to the Brisbane Club. 42 years are remaining on the lease.
Speaking on the deal, fund manager James Freeman commented:
[241 Adelaide Street] was identified as non-core to AOF and we are pleased to have entered into a conditional contract to dispose of this asset. The purchaser has also entered into arrangements with the Brisbane Club to acquire the freehold. AOF's sale is conditional upon completion of the acquisition of the freehold. We are targeting settlement prior to 30 June 2021.
In addition to the asset sale, Australian Unity also announced the suspension of its DRP for Q3 FY21.
According to the Commonwealth Bank of Australia (ASX: CBA), a DRP is an alternative method for dividend payments. Instead of the company reimbursing you its profits through cash, it will automatically invest the payment into new shares for the owner. These shares are sometimes issued at a discount. No fees are associated with the issuance of new shares.
Finally, Australian Unity confirmed it would meet its FY21 FFO guidance of 18.3 – 18.7 cents per share.
Australian Unity share price snapshot
Shares in the fund crashed at the height of the COVID-19 pandemic, reaching a low of $1.50. While they have recovered since then, the share price is still 16.23% down on this time last year.
Australian Unity has a market capitalisation of $361.6 million.
